Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

BRITISH RAILWAYS BILL

Lords amendments agreed to.

LOTHIAN REGION (EDINBURGH WESTERN RELIEF ROAD) ORDER CONFIRMATION BILL

Ordered,
That the Committee appointed to join with a Committee of the Lords as the Joint Committee to which the Lothian Region (Edinburgh Western Relief Road) Order Confirmation Bill stands referred have leave to visit and inspect the site of the proposed road, provided that no evidence shall be taken in the course of such visit and that any party who has made an Appearance before the Committee be permitted to attend by his Counsel, Agent or other representative.—(The First Deputy Chairman of Ways and Means.]

FELIXSTOWE DOCK AND RAILWAY BILL

Motion made, and Question proposed,
That leave be given to the Committee on the Felixstowe Dock and Railway Bill to sit with two Members to-morrow and thereafter. — [The First Deputy Chairman of Ways and Means.]

Hon. Members: Object.

Debate to be resumed tomorrow at Seven o'clock.

FELIXSTOWE DOCK AND RAILWAY BILL

Motion made, and Question proposed,
That the quorum for conducting business in relation to the Committee on the Felixstowe Dock and Railway Bill remain as at present.—(Mr. Willie W. Hamilton.]

Hon. Members: Object.

Debate to be resumed tomorrow at Seven o'clock.

Oral Answers to Questions — DEFENCE

Research and Development

Mr. Brandon-Bravo: asked the Secretary of State for Defence what steps he is taking to promote civil spin-off from defence research and development.

The Parliamentary Under-Secretary of State for Defence Procurement (Mr. John Lee): Civil spin-off from defence research is sought and encouraged through the British Technology Group, the patenting of inventions and direct contacts between the Department and industry. These arrangements are now complemented by the activities of Defence Technology Enterprises, a private sector company established as a joint initiative between the MOD and the private sector.

Mr. Brandon-Bravo: I welcome that reply. I know that my hon. Friend is aware of the concern in many quarters that so much of the nation's research and development is defence orientated. Will he tell the House a little more about the enterprise project, which, I believe, involves a partnership between public and private money?

Mr. Lee: Defence Technology Enterprises is a joint initiative. The share capital is owned entirely by the private sector. It is making encouraging progress. There are executives of Defence Technology Enterprises in three major research establishments— Malvern, Farnborough and Portsdown — seeking ideas and concepts for commercial exploitation. The first licence—for software programme verification—has already been agreed.

Mr. Douglas: What civil spin-off will result from the memorandum of understanding between the Government and the United States on the strategic defence initiative?

Mr. Lee: We expect that, in the fullness of time, there will be a substantial spin-off. It is impossible to be too specific at this stage.

Sir Antony Buck: Does my hon. Friend agree that a further spin-off will be substantial defence sales abroad? Will he confirm that those sales are currently about £2·5 billion, and will he say whether they are declining or expanding?

Mr. Lee: My hon. and learned Friend is absolutely right. Defence sales are about £2·5 billion a year, or 3 to 4 per cent. of our total national exports. That excludes the Saudi aerospace contract, which is substantially more than that.

Westland EH101

Mr. Norman Atkinson: asked the Secretary of State for Defence what are the future prospects for the Westland EH101 helicopter programme; and if he will make a statement.

The Minister of State for Defence Procurement (Mr. Norman Lamont): The EH101 has numerous advanced design features which will give it an unrivalled capability in the anti-submarine warfare role in the Royal Navy and the Italian navy. We expect it to sell well in both military and civil markets worldwide.

Mr. Atkinson: Is the Minister aware that his predecessor said that the EH101 helicopter programme would be an integral part of our future defence strategy? Is he further aware that Sir John Cuckney is reported to have said on two occasions that the Westland Helicopter Company would not join in partnership or merge with any company which refused to accept all that was involved in the EH101 programme? As Sikorsky has said that it does not support the EH101, will the Minister reaffirm that the British intention is to support Westland with Europe rather than with Sikorsky?

Mr. Lamont: I shall consider carefully what the hon. Gentleman has said. My understanding is that the EH101 is likely to go ahead, whatever the outcome of the present dispute about the future of Westland.

Mr. Wilkinson: Is it not a fact that the sale of the EH101 to the United States, particularly the civil version, would be greatly facilitated by the support of a United States partner in Westland? As United Technologies-Sikorsky does not have an aeroplane of that class, does it not seem to be an ideal product for it to promote?

Mr. Lamont: My hon. Friend made that point in a recent debate. My hon. Friend, however skilful, will not tempt me to comment on the merits of the rival suitors for Westland.

Mr. Ashdown: Is the Minister aware that the Secretary of State and his predecessors have frequently said that whichever partner is chosen for Westland, it cannot affect the EH101? Is he further aware that Sikorsky, far from withdrawing its support for the EH101, has said that if the opportunity should arise it will assist in selling the EH101 to the United States? Does he agree that that may be a second experience, building on the profitable experience from the sale of Harrier, of selling excellent British defence equipment to the United States, thus creating the two-way stream that we have all sought?

Mr. Lamont: I am grateful to the hon. Gentleman for correcting the hon. Member for Tottenham (Mr. Atkinson). As I said in my reply, I do not believe that what he has said is correct.

Mr. Denzil Davies: Will the Minister confirm that the Ministry of Defence and the armed forces have no desire, need or money for the Black Hawk helicopter made by Sikorsky?

Mr. Lamont: The position on the Black Hawk is as was stated by my right hon. Friend the Member for Henley (Mr. Heseltine).

Challenger Tank

Mr. Fatchett: asked the Secretary of State for Defence if he is likely to announce further orders for the Challenger tank; and if will make a statement.

Mr. Norman Lamont: Possible further orders of Challenger are being considered as part of the annual recosting of the defence programme. It is too soon to say whether further orders will be placed.

Mr. Fatchett: Is the Minister aware of the widespread fear in Leeds that, because of the delay in placing further orders, jobs will be lost and the ability to continue to produce the next generation of tanks will be put in

jeopardy? Is it not time that the Minister stopped delaying the decision, placed an order, and ensured job security for skilled and other people in Leeds?

Mr. Lamont: The function of the royal ordnance factory must be to supply what the country needs for its defence. The basis of policy cannot simply be to maintain employment. However, I am fully aware of the importance of the Challenger order to the Leeds factory.

Mr. Marlowe: Just as the tank replaced the horse as the main weapon available to the cavalry, is there not a chance that the helicopter may replace the tank?

Mr. Lamont: The needs of different systems and the best way to counter a tank threat from a potential enemy are constantly examined in the new integrated structure within the Ministry of Defence.

Mr. McNamara: Is it not a fact that the Ministry of Defence has said that it wants to increase orders for the Challenger tank, that the Army wants it, and that the mess that the Government have made of the defence budget alone is delaying the placing of the orders?

Mr. Lamont: The Government have already placed orders for six regiments of Challenger, and we intend that further orders should be placed in future. When those orders can be placed will depend on the resources available.

Mr. Meadowcroft: Why does the Minister hide behind the shield of market forces when buying necessary equipment? Does he not understand that timing is crucial for workers in Leeds? Why does he procrastinate over placing an order when it is crucial to the security of jobs in Leeds? Why does he not place the order and get on with it?

Mr. Lamont: I understand the importance for Leeds, but the Government's function is not to maintain capacity merely for the sake of it.

Defence Review

Mr. Gordon Brown: asked the Secretary of State for Defence when he expects to conduct a defence review.

Mr. Nicholas Brown: asked the Secretary of State for Defence if he has any plans for a defence review.

Mr. Hardy: asked the Secretary of State for Defence what plans he has for a defence review.

Mr. Wallace: asked the Secretary of State for Defence if he has any plans to hold a defence review; and if he will make a statement.

The Secretary of State for Defence (Mr. George Younger): I explained in reply to my hon. Friend the Member for Crawley (Mr. Soames) on 30 January that while, in the usual way, decisions on priorities will have to be taken in the coming months in order to match the forward programme to the available cash, I see no need for any fundamental change in our defence commitments or in the main roles undertaken by our armed forces.

Mr. Gordon Brown: If the Secretary of State will not consider a full-scale defence review, will he at least review the risks and hazards to our defence forces' readiness if our helicopters are to be provided courtesy of Sikorsky-Fiat, our military vehicles are to be made available courtesy of


General Motors of Detroit and our naval frigates and submarines, and even our nuclear deterrents, are to be refitted by Foster Wheeler or some other international conglomerate? Will the right hon. Gentleman study the letter from his hon. Friend the Minister for Trade, who expressed his complete opposition to the privatisation of the royal dockyards and warned of the fear that they might fall into the hands of strangers?

Mr. Younger: We always take the greatest trouble to ensure that in any changes this country's security of supply is maintained. It might be of interest to the hon. Gentleman if I remind him that since the 1930s the vast majority of military trucks used in this country have been bought from a company owned by Americans. That does not appear to have done us much harm.

Mr. Nicholas Brown: What assurances can the Secretary of State give to the Royal Navy and the warship building communities that they will not be the major victims of any expenditure cuts in his Department? When will he place the three type 23 warship orders that are scheduled for this year, and when will he order the fleet auxiliaries?

Mr. Younger: I have nothing to add to what my hon. Friends the Minister of State for Defence Procurement and the Parliamentary Under-Secretary of State for Defence Procurement have said about the orders in the debates which have taken place in the past two weeks. On security, I should have thought that all the hon. Member's constituents and those of his hon. Friend the Member for Dunfermline, East (Mr. Brown) would be looking with some dread at the possibility of the Labour party ever coming back into office, because if that happens there will be huge job losses in those constituencies.

Mr. Hardy: With chickens rapidly coming home to roost and Treasury forecasts of defence spending proving rapidly to be awry, would it not be as well for the Secretary of State to recognise the problem and to act or announce decisions upon it now rather than wait for further time to elapse and for his predecessor's role to be forgotten?

Mr. Younger: With regard to recognising facts, the hon. Gentleman must recognise that after six and a half years of this Government the defence budget is approximately 20 per cent., in real terms, above what it was in 1979. We should put that against statements by the right hon. Member for Llanelli (Mr. Davies), who has made it clear in debates that the Labour party has no intention of increasing the present levels of conventional spending. 1 do not believe that the hon. Gentleman has a leg to stand on.

Mr. Wallace: Does the Secretary of State accept that the so-called salami-slicing of defence spending, which is implicit in his answer, will continue to lower the morale of our forces? In recent months that has led to increasing numbers of resignations. Will he make a virtue out of necessity and announce the abandonment of the Trident project, which means not just high opportunity costs in terms of new conventional equipment, but a considerable escalation in our nuclear fire power at a time when there is serious negotiation over deep cuts?

Mr. Younger: I do not accept most of the hon. Gentleman's premises. To abandon our Trident programme would be to make a grave change in this country's future security. I think, but I am not sure, that

his SDP allies propose not just to abandon Trident but to replace it with something else. I do not know where they would find the money for that.

Mr. John Browne: Does my right hon. Friend accept that deterrence is the product of capability times will, and that cuts in defence give the impression to other nations that we lack the will to defend ourselves? Will he assure the House that future defence reviews will not contain cuts in effective spending and effective capability?

Mr. Younger: I understand my hon. Friend's point on future cuts. We have clearly laid out the provisions for defence for the next three years. I repeat that that starts from a position at least 20 per cent. higher than it was six years ago, thanks to the action of this Government.

Dr. Hampson: Will my right hon. Friend confirm that what he has just said means that there is a firm commitment to Trident? Will he comment on the recent press speculation on a review of or a delay in the Trident programme?

Mr. Younger: There is certainly a firm commitment to Trident. The programme is on course. There is no change in the Government's position.

Sir Anthony Grant: In his review, will my right hon. Friend seek views on cruise missile deployment, especially that of the Liberal party and the SDP, because it seems to be obscure at the moment?

Mr. Younger: I appreciate what my hon. Friend says. However I should make it clear that I am not conducting a review on the main components of our defence stature. I am considering ways in which the available cash can be worked into it. I believe that consulting the SDP and the Liberal party about their plans would be time-consuming and not a profitable exercise.

Sir Nicholas Bonsor: When my right hon. Friend reviews our defence requirements, will he bear in mind the importance of maintaining an adequate surface fleet, and will he consider the merits of the short, fat frigate design?

Mr. Younger: I appreciate my hon. Friend's point about the surface fleet, which we shall be taking into account. The design of future frigates is another matter.

Mr. Dalyell: In the work carried out by the right hon. Gentleman in preparation for the review, are any of the papers of the right hon. Member for Henley (Mr. Heseltine) or of Sir John Nott denied to him?

Mr. Younger: I am not aware of any papers being denied to me. I must again make it clear that I am not conducting a defence review in the terms that the Opposition consider it to be. I am examining the present resources. Some difficult decisions will have to be taken, but there will be no need for any change in our main defence posture.

Sir Geoffrey Johnson Smith: Is my right hon. Friend aware that we welcome his intention not to have a fundamental review on defence? The Opposition would welcome it, because they want to destroy a British independent deterrent.

Mr. Younger: My hon. Friend is perfectly right. The Opposition have done that twice in recent memory, and it has not done our defence any good.

Mr. Denzil Davies: I welcome the right hon. Gentleman's decision not to have a fundamental review,


but like a good Scotsman he is having a cash review. When that cash review is complete, the defence budget will be seen to be out of control by £1 billion. Is it not impossible to finance Trident and all the existing conventional commitments at the same time? Something must give—Trident or conventional defence.

Mr. Younger: What is taking place is the normal annual process of a review of the long-term costings of the defence programme. Regarding matching the two factors, one cannot undertake to buy everything that everyone wants in each department. There is no call for any fundamental review of our defence posture.

Mr. Soames: Will my right hon. Friend acknowledge that it is folly to pretend that there is no crisis in defence spending in Britain today? Does he agree that it is far better to have a defence review now to tackle the fundamental choices that must be made rather than wait until the crisis becomes untenable?

Mr. Younger: I know my hon. Friend's long-held strong views on this subject. I assure him that in my examination of the defence budget I shall not leave anything to chance. I shall take the greatest care.

Defence Procurement

Mr. Willie W. Hamilton: asked the Secretary of State for Defence when he next intends to meet representatives of British defence manufacturers to discuss defence procurement.

Mr. Younger: I intend to chair the next meeting of the National Defence Industries Council on 27 February.

Mr. Hamilton: Does the right hon. Gentleman agree that the future of the Nimrod project is very much in question because of its escalating cost? That project is manufactured primarily by GEC. When the chairman of GEC, the right hon. Member for Waveney (Mr. Prior), makes representations to the right hon. Gentleman, does he speak on behalf of his constituents in Waveney, or is he earning his £60,000 a year as chairman of GEC?

Mr. Younger: Another question has been put down on this subject, but I can tell the hon. Gentleman that when my right hon. Friend the Member for Waveney (Mr. Prior) speaks to me as chairman of GEC, he is, of course, speaking for that company.

Sir John Farr: Can my right hon. Friend say whether the 50 or 60 per cent. of the content of Trident that is supposed to be British is being prepared and whether approaches are being made to British manufacturers to fulfil that proper percentage?

Mr. Younger: We are anxious to secure the highest percentage of British participation in this project, and we shall follow my hon. Friend's suggestion.

Mr. Duffy: At that meeting on 27 February, will the Secretary of State ensure that British defence manufacturers are fully alive not only to the contract and job possibilities open to them through the Nunn and Quayle amendments and the Weinburger memorandum, but to the longer-term threat posed by Gramm-Rudmen?

Mr. Younger: I have no doubt that that subject will be discussed at the meeting.

Mr. Robert Atkins: In connection with the procurement of the 155mm shell for the FH70, does my

right hon. Friend agree that had that procurement been from a British company the delay of 15 months that has surrounded this contract would have necessitated possible cancellation and second sourcing from another company? Why should it be any different when we are procuring the balance of the contract from Rheinmetall in Dusseldorf, which is harming many ordnance factories, including the one in my constituency?

Mr. Younger: I appreciate my hon. Friend's strong feelings on the matter, which affects his constituents, but, as he knows, these purchases are part of a work-sharing agreement which is of mutual benefit to West Germany and Britain. It would be impossible to upset the agreement without causing great difficulties.

HMS Fearless and Intrepid

Mr. Dixon: asked the Secretary of State for Defence when he expects to announce the order of replacements for HMS Fearless and Intrepid.

Mr. Lee: In anticipation of the current specialist amphibious ships coming to the end of their useful lives in about the mid-1990s, we have, during the past year, been examining all the aspects of our future amphibious capability in relation to our overall defence needs. We expect to make a decision on our future amphibious capability later this year.

Mr. Dixon: As it has been reported that the joint chiefs of staff have recommended the complete replacement of these two vessels, why does the Minister not accept their advice and place these orders as early as possible, preferably on the River Tyne, where the shipyard workers are looking for work from this Government, bearing in mind the uncertainty about the type 23 and the royal fleet auxiliaries?

Mr. Lee: I have nothing to add to my reply in terms of timing. The obtaining of any future orders will be a matter of competition. As the hon. Gentleman knows, we are evaluating tenders from Swan Hunter in his constituency and from Harland and Wolff.

Mr. Allen McKay: How much of the surface fleet will the Government let go to keep Trident? How much of the manufacture and maintenance of Trident will be carried out by British manufacturers?

Mr. Lee: We have every intention of maintaining a fleet of about 50 escort vessels.

Mr. O'Neill: Given that the Government will have only a cash review and that it is not to be a fundamental review, how can the Minister give any assurances about the size of the fleet or, indeed, about the amphibious craft about which my hon. Friend the Member for Jarrow (Mr. Dixon) asked him?

Mr. Lee: The hon. Gentleman and the House need only examine our naval expenditure since 1979 to know that we have a record of which to be proud. We shall not let the conventional Navy down.

NATO Exercises

Mr. Kirkwood: asked the Secretary of State for Defence if troops from the North Atlantic Treaty Organisation exercising in the United Kingdom are required to notify his Department of the equipment and weapons to be involved; and if he will make a statement.

The Minister of State for the Armed Forces (Mr. John Stanley): We expect all non-UK NATO service personnel exercising in the United Kingdom to do so after consulting, and with the concurrence of, the relevant Ministry of Defence authorities, which would be notified in advance of the nature of any weapons and military equipment to be used.

Mr. Kirkwood: Will the Minister confirm that last July his Department said that British troops were exercising with American troops in West Germany with atomic demolition munitions? Can he give the House an assurance that if permission were asked for these weapons, or even dummy substitutes, to be used on exercises in the United Kingdom his Department would refuse to give authority for their use?

Mr. Stanley: The hon. Gentleman will know that we do not comment on the presence or otherwise of nuclear weapons. As to the nuclear assets that the British forces have, the hon. Gentleman will see the references to those in the "Statement on the Defence Estimates".

Mr. Stokes: Is my hon. Friend aware that far from carping at the presence of our allies in this country, most people gladly welcome them?

Mr. Stanley: My hon. Friend is entirely correct. I suggest that the commitment by the official Opposition to send the Americans packing from this country is the single most disastrous commitment made by any political party since the war.

Nimrod Early Warning System

Dr. Marek: asked the Secretary of State for Defence what is the current cost of the Nimrod AEW Mk. 3.

Mr. Stephen Ross: asked the Secretary of State for Defence if he will make a statement on the latest position on the Nimrod air early warning system.

Mr. Younger: By the end of Novermber 1985 some £646 million at outturn prices had been spent or committed on the Nimrod AEW Mk. 3 project; this equates to £882 million at 1985–86 average prices. We are currently in negotiation with GEC Avionics Ltd. and hope shortly to be in a position to announce our decision on the best way forward.

Dr. Marek: Does the Secretary of State agree that the technology should continue to be available in this country at GEC? Does he further further agree that the jobs associated with that technology should continue to exist in that or a closely-related sector? Does he agree that the public should get value for money from this policy? If he agrees with those three principles, what is he going to do about the mess he is now in?

Mr. Younger: I agree about the desirability of having British technology kept to the fore. That is important, as are the jobs involved. However, my other job is to ensure that the country gets good value on defence spending, and it is in that context that I have had these negotiations.

Mr. Ross: Has not a great deal of money already been spent on this project, which was not the design that the RAF wanted in the first place? What is the estimated cost of finishing the project to RAF standards and satisfaction, and what is the time scale involved?

Mr. Younger: Both those matters are part of the negotiations that I am having with GEC Avionics. We are trying to establish the answer to both those questions—how much it will cost to complete the project, and the likely time scale. The hon. Gentleman will understand that I cannot comment further on that while the negotiations are in train.

Mr. Favell: How much more will the project cost? Does my right hon. Friend agree that while we must learn from the lessons of the past, it would now be false economy to abandon the Nimrod project, in view of the fact that all 11 aeroplanes are, to all intents and purposes, ready, thanks to British Aerospace, Woodford, and that it would cost at least between £600 million and £800 million to purchase an American alternative, which would take at least three years to deliver?

Mr. Younger: That is a good summary of a difficult situation. As always, my objective will be to do my best to see that the RAF gets a product that will do what it wants it to do, on time and at reasonable cost.

Mr. Robert C. Brown: Is the right hon. Gentleman aware that when the decision was taken 10 years ago to keep the technology and the work force of a British firm together, it was a good decision? This aircraft was then urgently required. It is now 10 years on and we are still waiting for this urgent requirement. When will we finally resolve this matter?

Mr. Younger: It is of great importance to the defence of the country, and I agree with the hon. Gentleman's remark about urgency. He will I am sure agree that it is important from all points of view, not least that of the RAF, that we get the equipment to do the job that we have asked it to do.

Mr. Wilkinson: Is it not a fact that the Mark 3 Nimrod saga is the worst procurement scandal since world war 2? Will my right hon. Friend have the courage to grasp the nettle and not put more good money after bad, but rather procure the E3A Sentry, which works, and which will bring commonality with the rest of air defences in western Europe?

Mr. Younger: I very much appreciate what my hon. Friend says and note it carefully, but he will understand that I would not want to comment on it while negotiations are in train.

Mr. McNamara: If Nimrod were cancelled, would that be a fundamental or just a cash review? Can the right hon. Gentleman confirm that on Thursday it will be proposed in Cabinet that the Government purchase or lease six AWACS, while a conclusion about the future of the Nimrods is made? Would it be possible to put the GEC system into a different British aeroplane?

Mr. Younger: Those are mostly points that are part of the negotiations. No decision of any kind has been taken to cancel the Nimrod project at this stage, and I cannot comment on anything that might or might not come up before my right hon. Friends and me in Cabinet meetings. It is far from clear that GEC equipment could just be put into another aircraft. The whole thing holds together as one system.

Trident

Mr. Roy Hughes: asked the Secretary of State for Defence if he has made any up-to-date assessment of the implications of the Trident programme for conventional defence spending.

Mr. Stanley: My right hon. Friend the Secretary of State for Defence expects to be able to announce a revised costing for the Trident programme fairly soon. The Government's firm view is that, through the procurement of Trident, the United Kingdom can make an immeasurably greater contribution to deterrence and to the preservation of peace than by having conventional forces alone.

Mr. Hughes: Can the right hon. Gentleman confirm that he is prepared to sacrifice conventional defence so that the Trident programme can go ahead unimpeded?

Mr. Stanley: There is no question of sacrificing conventional defence. My right hon. Friend has already made it clear that we have built up conventional defence expenditure to a vastly higher level than it was when we came to office in 1979. We must consider the totality of deterrence. Our firm view, which was shared by the Labour Government, which the hon. Gentleman presumably supported, is that a combination of nuclear and conventional deterrence is much better for the security interests of Britain and NATO than resting on conventional weapons only.

Mr. Greenway: Does my right hon. Friend agree that conventional defence would be no defence without a nuclear deterrent? Does he further agree that the Trident programme will enable the twin arms of defence to go ahead together?

Mr. Stanley: My hon. Friend is entirely right. It is not possible to provide protection against nuclear blackmail through conventional weapons. He is also right in saying that nuclear and conventional defence represent the best combination for Britain. It has been accepted by successive Governments.

Mr. Boyes: Does the right hon. Gentleman agree that our forces are ill-equipped to carry out their major task, which is to defend Britain? Would not the cancellation of Trident, a proposal which is supported by the overwhelming majority of the British people, release cash to create jobs in British industry and to build the essential non-nuclear defence equipment that we need?

Mr. Stanley: Our forces are substantially better equipped than they were when the Labour party was in office. I am glad to say that the British people have voted in election after election for the preservation of Britain's independent strategic nuclear deterrent.

Sir Antony Buck: Does my right hon. Friend agree that the reasons for our acquiring this new weapon are precisely the same as those which led the Labour party to update Polaris with Chevaline, without even informing the House of Commons of the decision?

Mr. Stanley: My hon. and learned Friend is entirely right. Many people will wonder why the Labour party wants to run away from the modernisation of Britain's independent deterrent in opposition when it did the same covertly when in office.

Mr. Denzil Davies: Is the Minister aware that the Secretary of State has made an important statement? The right hon. Gentleman said that there will not be a fundamental review but a cash review and that Trident is fundamental and sacrosanct. Does that mean that the cash review will fall entirely on Britain's conventional forces?

Mr. Stanley: We shall continue with the Trident programme.

Sir Geoffrey Johnson Smith: If the Government were so foolish as to cancel Trident, how many tank divisions would the money buy?

Mr. Stanley: I shall not give my hon. Friend an answer off the top of my head, but I can tell him that any number of tank divisions would provide no protection against the nuclear blackmail posed by the massive weight of the Soviet Union's nuclear armoury.

Naval Contracts (Scotland)

Mr. Bruce: asked the Secretary of State for Defence if he has any plans to award naval contracts to shipyards in Scotland.

Mr. Lee: There are currently four frigates and two salvage vessels being constructed in Scottish yards employing directly over 5,000 people. In addition, we are planning to place an order for a range mooring vessel with Scott Lithgow later this year, followed by two lighters, subject to the negotiation of satisfactory terms and conditions.

Mr. Bruce: Is the Minister aware that his answer will be greeted with some disappointment in Scotland where a number of yards are in desperate need of naval orders? Is he further aware of the resentment at Hall Russell in Aberdeen that it was not able to bid for the last order which he mentioned? Will he now recognise that, because it is a designated warship yard, it is in urgent need of a Government order to enable its future to be secured? Cannot he come forward with something more positive than the reply he has just given?

Mr. Lee: I am sympathetic to the situation in Hall Russell, but I have to say that sadly there is overcapacity in all our warship yards, and future orders have to be won on the basis of competition.

Mr. Strang: Is it not a scandal that the Government are prepared to spend thousands of millions of pounds on American technology and American jobs, but are not prepared to invest in British jobs and British yards? Why do the Government not do something, for example, about the decline in the British merchant fleet?

Mr. Lee: The fact is that 95 per cent. of the £8·5 billion procurement spend is spent within the United Kingdom and sustains our defence budget — [Interruption.]—sustains in this country about 1·2 million jobs.

Defence Procurement

Mr. Ashton: asked the Secretary of State for Defence how many defence procurement contracts were post-costed in 1969 and in each subsequent year.

Mr. Norman Lamont: Post-costing of defence procurement contracts began in 1973. The number of contracts which have been post-costed each year has


varied between 39 and 107, and the average is 80. I am arranging for the full figures to be published in the Official Report.

Mr. Ashton: When it comes to social security this Government watch every penny and every candle end, and hire an army of inspectors to do it. When it comes to national security they appear to take a very relaxed attitude and allow padding to go on. They seem to think that everything is way above board provided that it is defence expenditure.

Mr. Lamont: The post-costing arrangements cover 50 per cent. of the contracts of the Ministry of Defence by value. I am making arrangements for the post-costing arrangements to be increased further so that they cover a much larger proportion by number as well as by value.
Following are the figures:


Year
Number of Contracts post-costed


1973
63


1974
39


1975
64


1976
76


1977
96


1978
86


1979
106


1980
84


1981
95


1982
77


1983
107


1984
70

Dowty Rotol

Mr. Madden: asked the Secretary of State for Defence what contracts are currently placed with Dowty Rotol.

Mr. Lamont: It is not the practice to reveal details of contracts placed with individual contractors, as this information is commercial in confidence. However, the overall level of direct business with Dowty Rotol, as indicated by payments made in the last complete financial year, is of the order of £11 million per annum. The number of contracts with the company is 252.

Mr. Madden: Can the Minister say whether any information concerning contracts with this firm has been passed to the Director of Public Prosecutions? If so, what decision has the DPP reached, and what action will be taken against this company for fleecing the Ministry of Defence and British taxpayers?

Mr. Lamont: As a result of investigation into Dowty Rotol's management of the CRSP store contract following a Ministry of Defence police investigation, the matter is being considered by the DPP and is, therefore, sub judice.

Trident

Mr. Pike: asked the Secretary of State for Defence what has been the effect of recent exchange rate flutuations on the estimated cost of Trident for the current financial year.

Mr. Norman Lamont: The estimate of the cost of Trident is £9·285 million at average 1984–85 prices and at

an exchange rate of £1 to $1·38. As my right hon. Friend the Minister of State for the Armed Forces has just said, a revised costing for Trident will be announced shortly.

Mr. Pike: Will the Minister recognise that the majority of people in the country believe that Trident creates a greater threat of our being attacked by nuclear weapons, and that the unpredictability of the exchange rate is a threat to the Government being able to provide adequate conventional defence forces for the country?

Mr. Lamont: The vast majority of the people believe overwhelmingly that Britain ought to retain its own national independent deterrent. That has been shown in election after election. The hon. Gentleman cannot talk, since the Labour party has indicated that it would not increase spending on conventional forces.

Mr. Marlow: In the hopefully unlikely event of the Warsaw pact unleashing its military machine westwards towards the Channel, would we be able to stop it by conventional forces alone?

Mr. Lamont: My hon. Friend is absolutely right. No amount of spending on conventional weapons could possibly purchase an equivalent amount of deterrence.

Fire Losses

Mr. Michael McNair-Wilson: asked the Secretary of State for Defence what losses in buildings and stores by fire damage have been experienced in the past five years.

Mr. Lee: Fire damage to Ministry of Defence buildings and stores has resulted in losses of £166 million over the past five years. By far the largest proportion of these losses, estimated by the board of inquiry at £152 million, is attributable to the fire at the Central Ordnance Depot, Donnington, on 24 June 1983.

Mr. Wilson: Can the Minister say to what extent the losses are covered by insurance?

Mr. Lee: My understanding is that it is not normal practice for the Ministry of Defence to insure.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Amess: asked the Prime Minister if she will list her official engagements for Tuesday 11 February.

The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House I shall be having further meetings later today. This evening I shall be addressing the National Farmers Union.

Mr. Amess: When planning her engagements, will my right hon. Friend take time to visit some inner city areas to see the problems for herself and how the Government are trying to tackle them? When she does that, will she make a point of not hobnobbing with those council leaders who back violence and rioters against the police?

The Prime Minister: My hon. Friend will be pleased to know that this morning I spent some time looking at the records of the excellent work done in inner cities under the urban programme and under the derelict land grants, and very good it is. I take seriously the point my hon. Friend makes that council leaders who undermine the role of the police do great harm to the prospects of our inner cities.

Mr. Merlyn Rees: In view of those brilliantly coordinated, hat-in-ring weekend speeches at Blackpool, does the Prime Minister not intend to lead her Government at the next general election?

The Prime Minister: May I remind the right hon. Gentleman that I have seen off two Labour Governments and hope to see off a third.

Mr. Gerald Howarth: asked the Prime Minister if she will list her official engagements for Thursday 11 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Howarth: Is my right hon. Friend aware that in my constituency, where unemployment fell by 8 per cent. between September 1984 and the end of last year, a good number of companies are reporting better export prospects, vastly improved working practices and increased profitability? Does she agree that that is in large measure due to the improved business climate encouraged by the Government under her firm leadership?

The Prime Minister: I am grateful to my hon. Friend for giving so cogently some of the most excellent news. There are areas where unemployment has fallen and jobs are being created. Indeed, our rate of job creation is the highest in Europe but not yet fast enough to bring about the reduction in unemployment everywhere that we wish to see. The work of manufacturing industry at the moment is rising and is excellent.

Mr. Kinnock: As the number of people who have been unemployed for more than a year is now larger than the total who were unemployed in 1979, is it not clear that a Prime Minister, who thinks that she is too old to stay and too old to go, should relieve the whole country and get out?

The Prime Minister: May I remind the right hon. Gentleman that I have not only seen off two Labour Governments; but I have seen off three Labour leaders and I hope to see off a fourth.

Mr. Kinnock: That does not convince anybody on the Labour Benches, and it convinces very few Conservatives. It convinces even fewer outside the House. Is it not the case that, given much longer, the Prime Minister will see off the country?

The Prime Minister: I hope that we shall have a third Conservative Government, which would be greatly to the country's advantage. The greatest disadvantage to the country would be if the Labour party won. That will not happen.

Mr. Sackville: asked the Prime Minister if she will list her official engagements for Tuesday 11 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Sackville: Has my right hon. Friend taken note of the fact that our aerospace industries exported £4 billion of production last year, representing a 22 per cent. growth over the previous year? In the light of that magnificent achievement by the entire work force of aerospace industries, will she repudiate the constant carping and attempts to denigrate our manufacturing future by the Opposition?

The Prime Minister: Yes, gladly. I congratulate British Aerospace on its excellent export record. I also

congratulate many other manufacturing industries, because last year exports by manufacturing industries reached an all-time high, which is a matter for congratulation to both management and work force alike.

Dr. Owen: Is the Prime Minister aware that there is a widespread feeling that petrol prices at the pumps are not coming down anywhere near fast enough? To ensure that they do come down, will she scotch any rumours that the Government intend to increase the price of petrol?

The Prime Minister: I have had a similar question twice recently, and I have pointed out that I hope that petrol prices will come down further and faster. The right hon. Gentleman is trying a fast one about the Budget, but he will not succeed.

Mr. Pawsey: asked the Prime Minister if she will list her official engagements for Tuesday 11 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Pawsey: Is my right hon. Friend aware that although the United Kingdom continues to be the most generous in student support, recent changes in supplementary and housing benefit, allied to an increase in grant of 2 per cent., may cause some hardship to some students? Therefore, does she agree that we should again be looking at a mix of student loans and grants?

The Prime Minister: I am grateful to my hon. Friend for pointing out that in the United Kingdom student grants are still the best the world over. I note what he says about student loans. I think that perhaps a number of students may take up loans privately, which, of course, they are free to do. I would also point out that the proportion of 18-year-olds going into higher education is the highest ever. That is good news.

Mr. Dormand: Will the Prime Minister give urgent attention to the serious inconsistency which has arisen in connection with the modified colliery review procedure? Is she aware that the assessor in the case of Bates' colliery in Northumberland has upheld the appeal saying that he must take into consideration the social and economic effects upon the community, whereas at Hordern colliery in my constituency the assessor has said that he cannot take such considerations into account? Can that contradiction continue, and if not, what does the right hon. Lady propose to do about it?

The Prime Minister: That is a matter for the National Coal Board, but I will gladly pass on the points that the hon. Gentleman has made.

Mr. Evennett: asked the Prime Minister if she will list her official engagements for Tuesday 11 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Evennett: Will my right hon. Friend reaffirm her commitment to nursery education and to the present statutory school starting age? Does she agree that any increase to six or beyond would be detrimental to the education of children?

The Prime Minister: Yes, Sir. I gladly reinforce the Government's commitment to more nursery education. The level of provision for nursery children is at its best ever and I gladly confirm that there are no plans whatsoever to raise the school starting age to six years.

Mr. O'Brien: asked the Prime Minister if she will list her official engagements for Tuesday 11 February.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. O'Brien: Will the Prime Minister explain to the House and the country why Land Rover was not offered to the general public in the same way as Jaguar, so as to maintain jobs and employment in Britain?

The Prime Minister: We would like to have the privatisation of the whole of British Leyland. As the hon. Gentleman is aware, there are negotiations with General Motors for trucks and Land Rover-Leyland, and I think it best that those should be pursued. Should there be any other offers, they will be considered.

Sir Kenneth Lewis: Is my right hon. Friend aware that survival statistics produced by the Government show that women last longer than men?

The Prime Minister: I am grateful to my hon. Friend for making that deduction. I shall do my best to ensure that it continues to be correct.

Mr. Ashley: asked the Prime Minister if she will list her official engagements for Tuesday 11 February.

The Prime Minister: I refer the right hon. Gentleman to the reply that I gave some moments ago.

Mr. Ashley: Is the Prime Minister aware that more than 7,000 people were killed or seriously injured in industry, including the construction industry, last year, and that the Government's proposals to relax health and safety legislation will cause even more deaths and more serious disabilities? Will the Prime Minister put workers first for a change, and change her mind about the proposed legislation?

The Prime Minister: I do not believe that any relaxations in health and safety provisions are occurring that could possibly have that effect, or anything like it. If that were so, we would look at the proposal again.

Mr. Marlow: asked the Prime Minister if she will list her official engagements for Tuesday 11 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Marlow: As there is quite a lot of pressure now to improve the prospects in the private rented sector of housing to make new housing stock available to the general public, and as the Housing Bill is in Committee, would it not be a good idea if some amendments were put forward and the Government agreed to them?

The Prime Minister: I recognise the importance of my hon. Friend's supplementary question and his desire to increase the stock of houses in the private rented sector. That is something to which we must give our attention. Whether this comes within the long title of the Housing Bill is not for me to say.

Gainsborough

Mr. Leigh: asked the Prime Minister if she will pay an official visit to Gainsborough.

The Prime Minister: I have at present no plans to do So.

Mr. Leigh: I am sorry that my right hon. Friend has no plans to visit Gainsborough. Is she aware that

Gainsborough depends heavily on the agricultural community and that that community needs reassurance, following the debate initiated by the Liberal party last week, in which the hon. Member for Truro (Mr. Penhaligon) told me that he did not know what his party's quota policy was, in which the hon. Member for Brecon and Radnor (Mr. Livsey) said "We have no quota policy", in which the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) said, "We are against quotas", and in which the hon. Member for Caithness and Sutherland (Mr. Maclennan) said, "We are in favour of quotas"? It is asked, "If one alliance, why two parties?" Should we not ask, "If one alliance, why four quota policies?"

The Prime Minister: I congratulate my hon. Friend on the excellence of his supplementary question. I do not have time to visit Gainsborough, but there may be some farmers from the Gainsborough area in the audience that I shall be addressing this evening, and I shall have something to say about quotas.

Engagements

Mr. Tom Clarke: asked the Prime Minister if she will list her official engagements for Tuesday 11 February.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Clarke: Was the letter that was sent by the Leader of the House to the chairman of the North Shropshire Conservative Association approved by the Cabinet Committee? Should it not really have been sent to the chairman of the Conservative party?

The Prime Minister: I hope that the hon. Gentleman has read the letter. It was a most formidable speech about the excellence of Conservative policies and the necessity for continuity.

Mr. Budgen: asked the Prime Minister if she will list her official engagements for Tuesday 11 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Budgen: When my right hon. Friend speaks tonight to the National Farmers Union, will she emphasise to it that, once again, European Community expenditure, particularly on the common agricultural policy, is out of control and that the only way in which control can be achieved is by reducing agricultural prices in the EEC?

The Prime Minister: I shall be addressing very realistically the need to get down these surpluses and the need for both farmers and the Government to work together to do so. However, it must not be done by discriminating against Britain merely because our family farms are larger than those elsewhere in Europe.

Mr. Terry Fields: asked the Prime Minister if she will list her official engagements for Tuesday 11 February.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Fields: Given the Prime Minister's confidence in her economic policies and her platitudes about unemployment, may I ask how she answers the people of Liverpool, where there is escalating unemployment and a twofold attack by the Government on a Liverpool city council that is prepared to provide jobs for people in the Liverpool area?

The Prime Minister: If there are any complaints about the Liverpool city council, they should be made to the council. In fact, I would support many of the complaints that have been made. I have confidence in this

Government's economic policy. It is the right policy for Britain, for the creation of wealth and for the creation of jobs.

Severe Weather Payment

Mr. David Winnick: I beg to ask leave to move the Adjournment of the House, under Stnading Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the need for the exceptionally severe weather payment to be paid during the present very cold weather, and for other assistance to be provided by the Government for those on small limited incomes, especially the elderly, to help to pay fuel bills for heating purposes during this period.
My application deals with the need to ensure that the exceptionally severe weather payment is now paid, in view of the very cold weather, and that other assistance with fuel bills is given.
The importance of the matter is self explanatory. Hundreds of thousands of pensioners on the smallest incomes are suffering immense misery because they do not have the financial means to keep their accommodation any where near adequately heated.
The debate for which I am calling is needed because of the bureaucratic nightmare of trying to trigger off this exceptionally severe weather payment. The Government claim that, under the new regulations, district or branch managers of local offices are in effect responsible for making the decision. The managers understandably put the responsibility upon the regional officers of the Department of Health and Social Security. The regional offices in turn do not seem to have the knowledge with which to reach a decision on whether the weather is sufficiently cold for the special payment to be made. Therefore, the help that could be given to people who are on supplementary benefit is not being given. I believe, therefore, that this matter should be debated.
There are also many other people on small incomes, who are not in receipt of supplementary benefit, who receive no help with their heating bills. For example, three quarters of a million pensioners receive help with their rent or rates because their incomes are inadequate, but they do not receive supplementary benefit. During very cold weather they receive no help with their heating bills.
Surely one test of a civilised society is how far the Government are willing and able to assist those who can least afford to keep their homes warm. If people on ordinary incomes find that, because of the cold weather, they are facing difficulties over very large heating bills, how much more difficult will it be for those whose income is so low that literally every penny has to be counted? These are the people who should be helped.
I have made inquiries in my own area, the west midlands, and have found that the exceptionally severe weather payment is not being made. The Secretary of State for Social Services and other Ministers at the Department of Health and Social Security shrug off responsibility and say that it is nothing to do with them. Who, therefore, will decide this matter?
A debate is also needed because many people on small incomes receive no help. Either they have to face large bills or they have to turn off the heat and cover themselves in blankets, because they are terrified of receiving bills that they cannot possibly pay from the gas board or the electricity board.
For all these reasons, the Opposition believe that the Government should accept responsibility for the exceptionally severe weather payments. In those circumstances, I am asking for a debate under Standing Order No. 10.

Mr. Speaker: The hon. Member asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the need for the exceptionally severe weather payment to be paid during the present very cold weather, and for other assistance to be provided by the Government for those on small limited incomes, especially the elderly, to help to pay fuel bills for heating purposes during this period.
I have listened, as has the House, with care and sympathy to the hon. Member, but I regret that I do not consider that the matter he has raised is appropriate for discussion under Standing Order No. 10. I cannot, therefore, submit his application to the House.

Bates' Colliery

Mr. John Ryman: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the refusal of the National Coal Board to accept the strong recommendation of the independent colliery review tribunal with respect to Bates' colliery in Blyth.
My submission can be made briefly, you will be pleased to hear, Mr. Speaker. Having sifted the evidence for days on end, an independent judicial tribunal, which was presided over by an eminent barrister, made a careful and reasoned judicial decision. It recommended that the pit in my constituency should be kept open and should not be closed, as proposed by the NCB.
Last Friday, the NCB considered the matter and, within five minutes, decided to close Horden colliery in County Durham, whose closure had been recommended earlier. After a four-hour debate, the NCB refused to accept the recommendation of the independent tribunal that the pit in my constituency should be kept open.
Urgent consideration of this matter is needed because the jobs of more than 1,400 men depend on the pit. They have been kept dangling by the chairman of the NCB who, with his usual nonchalant incompetence, has deliberately sought to flout the decision of an independent tribunal, having said in advance that it would give due weight to the tribunal's recommendations.
It is unique for one party in an arbitration case to refuse to accept a decision that is unfavourable to it and yet accept a decision that is favourable. That is what the chairman of the NCB has done. The result is that this pit, which has had a threat hanging over it for months on end, is to be kept waiting for many more weeks while the NCB chairman and his fellow directors ponder the matter afresh.
My respectful submission is that the NCB should accept the decision that was made after the evidence had been sifted and should put the men out of their agony. Many jobs in the coal mining community of Northumberland depend on this colliery. I ask you, Mr. Speaker, not to dismiss my application out of hand but to consider it carefully. The Government have shirked their responsibilities throughout. The Secretary of State for Energy and his junior Minister, who is sitting on the Treasury Bench—

Mr. Dennis Skinner: They are laughing. The Tories are laughing. Look at them.

Mr. Ryman: The Secretary of State has failed to intervene at any stage, although on many occasions I have asked him to do so. I ask you, Mr. Speaker, to allow me to raise this urgent matter, giving it priority over other business, because so many jobs depend on this colliery.

Mr. Speaker: The hon. Member asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the refusal of the National Coal Board to accept the strong recommendation of the independent colliery review tribunal with respect to Bute colliery in Blyth.

Mr. Ryman: Bates'.

Mr. Speaker: It is wrongly written down here. I should have said:
Bates' colliery in Blyth.
I assure the hon. Member that I am not dismissing his application out of hand. He has been very persistent in this matter, but I regret that I must give him the same answer that I gave the hon. Member for Walsall, North (Mr. Winnick). I do not consider that the matter he has raised is appropriate for discussion under Standing Order No. 10. I cannot, therefore, submit his application to the House.

Leyland Bus

Mr. D. N. Campbell-Savours: rose—

Mr. Speaker: I have a third application. Can I ask if this application arose from information that came into the hon. Gentleman's possession after 12 o'clock.?

Mr. Campbell-Savours: Within 24 hours, Mr. Speaker.
I wish to raise a matter under Standing Order No. 10, which is urgent, important and specific namely,
the anti-competitive nature of the Laird-Leyland-Department of Trade and Industry discussions on the future of Leyland Bus.
The matter is specific in so far as it relates to negotiations now going on between the Laird group, Leyland and Department of Industry officials on the future of Leyland Bus's three plants, which cover 2,500 workers.
The matter is important because I have learned that, despite assurances, the BL board is looking for the best deal for Leyland Bus, and the Department is deliberately obstructing interest shown by other parties who might be interested in exploratory discussions on the future of Leyland Bus. That means that the BL board is favouring the Leyland group in a most unreasonable and anticompetitive way.
The Department is acting against the public interest. The BL board knows the danger of the takeover. It knows that if Laird pulled diesel multiple units and railbus work out of Workington, it would be removing, at a stroke, all competition to Laird-Metro Cammell Weymour, thus denying the possibility of dual sourcing of rail products, and leaving Leyland Workington to produce buses in a declining market. All Leyland work on the diversification of products and the move into railbus, much of which is funded by the taxpayer, would be lost.
The BL board also knows that the Laird group's bus market is a tiddler in the business which, although produces a good product, is but one fifth the size of Leyland Bus in terms of output. It lacks Leyland's technological base, export expertise, and component-manufacturing capability in axles and gearboxes. Laird is the tiddler in the bus business, endeavouring to marshall

the activities of the giant Leyland Bus. Leyland employees are most indignant about the way in which the matter is being handled.
The matter is urgent, because a decision on Laird is due in six weeks, and every day counts. If the objective of a retained and rationalised Leyland Bus reporting direct to the BL board is to be rejected, and the Government insist on privatisation, the company's negotiations should be open and above board, and invitations should go out to a number of parties inviting options. The Government are currently operating an inexcusable, highly irregular, closed-door, closed-shop series of negotiations.
Finally, the industry as a whole is bemused by the admissions in Laird Group's annual report 1984. That report accepts the inevitable decline of the British bus industry, yet that company will determine the future of the British bus industry. This is an admission of inability to bring the bus business round.
The matter is urgent. Every employee of Leyland Bus wants this debate to take place. They are worried about their future, Mr. Speaker, and I hope that you in your wisdom will give us the debate that we request.

Mr. Speaker: The hon. Member asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
The action of British Leyland, under instructions from the Department of Trade and Industry, in preventing the competitors of the Laird group from bidding for Leyland Bus.
I have listened with care to what the hon. Member has said. As he knows, my sole duty in considering an application under Standing Order No. 10 is to decide whether it should be given priority over the business already set down for this evening, or for tomorrow. I regret that I cannot find that the matter that he has raised meets all the criteria laid down in the Standing Order. Therefore, I cannot submit his application to the House. Doubtless he will find other ways of bringing the matter before the Chamber.

Mr. Campbell-Savours: Thank you, Mr. Speaker.

Immigration (Members' Representations)

Ms. Clare Short: On a point of order, Mr. Speaker. You will remember various exchanges since the Minister of State, Home Office, the hon. and learned Member for Ribble Valley (Mr. Waddington), made some wild allegations during Home Office questions that hon. Members had been using their powers wrongly in making representations for their constituents about immigration cases. A responsible member of my local press telephoned me to say that a written answer had been provided by the Minister, which states that there is to be a code of conduct for these matters, and that it is the product of negotiations between the parties. That is known to my local press. I was asked to comment on it, but I know nothing about it. My right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) knows nothing about it either. Surely, this is an abuse.

Mr. Gerald Kaufman: Further to my hon. Friend's point of order, Mr. Speaker. I hope that you and the Leader of the House, who is present, will look into the matter.
My hon. Friend has drawn your attention to two important matters. First, if this morning the Home Office released to the press the content of a parliamentary answer made today, it is a breach of what you regard as our most important rule, which is that no parliamentary answer should be released to the press before it has been made known to the House. Clearly that is a matter for you.
If that is the case, it draws attention to a second matter relating to the activities of the Home Office. It follows upon a leak of material which the Home Office is having to investigate, following information released to the Home Office about negotiations and correspondence between hon. Members and the Home Office which was in breach of the Official Secrets Act, and in which my hon. Friend the Member for Bradford, West (Mr. Madden) has been involved. That is a most serious matter. Moreover, if the information given to my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) is accurate, and it is claimed that negotiations on these matters have taken place between the Government and, presumably, me, I wish to make it perfectly clear that no such negotiations have taken place. Indeed, I have made it clear that we cannot negotiate without the authorisation of the parliamentary Labour party.
Those matters follow from the most important matter that my hon. Friend raised, which is whether the Home Office has released a parliamentary answer to the press before that answer has been given to the hon. Member concerned.

Mr. Max Madden: Further to that point of order, Mr. Speaker.

Mr. Dennis Skinner: Further to that point of order, Mr. Speaker.

Mr. Speaker: Order. I notice that question No. 102 on the Order Paper, for written answer, is in the name of the hon. and learned Member for Burton (Mr. Lawrence). The written answer would not normally become available to the hon. Gentleman until 3.30 pm, and he could withdraw his question until that time. It is now 3.47 pm. I have not

seen the answer to the question, and I do not know whether the hon. and learned Gentleman has. I accept what the right hon. Member for Manchester, Gorton (Mr. Kaufman) has said, and I hope that the press has not disclosed the information. I have no knowledge of that.

Mr. Madden: Further to the point of order. Two important matters are at stake. The first concerns the rights of all hon. Members to make representations on behalf of people who, for one reason or another, are seeking to enter the United Kingdom but have been refused entry. I am sure that you would wish nothing to alter the right of hon. Members in these matters, unless the House has given approval to hon. Members' rights being diminished, altered or varied in any way.
The second matter was referred to by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) and relates to a Home Office investigation into extremely detailed disclosures that were made about representations on immigrations by hon. Members from all parties. I understand from various replies that I have received from parliamentary questions that that is an internal Home Office inquiry. I have been told that the information gathered so far is not sufficient to be referred to the Director of Public Prosecutions and that the inquiry is due to be completed shortly.
It is an abuse of the House for the Executive, by administrative means, to seek in any way to diminish the rights of Members of the House on immigration matters. It is also an abuse to do that in advance of the findings of a Home Office internal inquiry designed to see whether the Official Secrets Act has been breached by the management of the immigration service or by officials in the Minister of State's office.
I urge you, Mr. Speaker, to ensure that nothing is done to change, vary or alter the rights of all hon. Members until the House has been given a full opportunity to hear from Ministers, what they are suggesting and so enable the House to express a view on the Executive's proposals.

Mr. Skinner: On a point of order, Mr. Speaker.

Mr. Speaker: Order. Is the hon. Gentleman's point of order on the same subject?

Mr. Skinner: Oh, yes.

Mr. Speaker: And is it helpful?

Mr. Skinner: Yes, by all means.
The important thing to remember is that increasingly the Government have abused the use of procedure. We have had several references to that in the past few weeks. The result is that the Chair has to make rulings of a kind which the Chair should not have to make.
The whole matter should be investigated by the appropriate Committee, albeit after an investigation by yourself, Mr. Speaker. Until such time as somebody wields the authority in this place on behalf of all hon. Members—which means Back-Bench Members as well as Front-Bench Members—this tawdry Government will continue abusing their position in their authoritarian way. Tinpot junior Ministers as well as the Prime Minister will do the same as they have done today. It is time that someone demonstrated to them that, despite the Government's massive majority, they are not going to get away with their attacks upon Back-Benchers, civil


liberties and freedom in the country. The Chair could, on occasion, demonstrate the kind of will which would prevail to some degree on the Government.

Mr. Kaufman: In response to the points of order put by my hon. Friend the Member for Birmingham, Ladywood (Ms. Short), myself and my hon. Friend the Member for Bradford, West (Mr. Madden), you have made it clear, Mr. Speaker, that a parliamentary answer can be withdrawn or changed or the question can be withdrawn before 3.30 pm. Therefore, it is an abuse of the House for a ministerial answer to be released to the press before 3.30 pm.
My hon. Friend the Member for Ladywood has informed me during these exchanges that the journalist telephoned her before 1 pm today. That was two and a half hours before the deadline which you stated, Mr. Speaker, ought to be accepted by Ministers. It is obvious from examining question No. 102 that that is a planted question which the Minister asked the hon. and learned Member for Burton (Mr. Lawrence) to put down.
This is not the first time that that has happened from the office of the Minister of State, Home Office, the hon. and learned Member for Ribble Valley (Mr. Waddington). I would say, Mr. Speaker, that, apart from the other matters which have been put before you, for that office to have planted a question and then, in its own interests, to have released the answer before it was made known to Parliament, is an abuse of the House.
We ask for your protection, Mr. Speaker. We also ask the Leader of the House, quite apart from any inquiries that Mr. Speaker might make, to make inquiries and come to the House, state the facts and offer the House an apology and a promise that nothing like that will arise again from the office of the Minister of State.

Mr. Speaker: None of these matters really concerns me. I am not responsible for questions that are tabled or the answers that are given. However, if what the right hon. Member for Manchester, Gorton (Mr. Kaufman) alleges is true, I would deprecate the giving of a written answer to the press before it has been given to the hon. Member concerned. That is clearly in breach of our conventions.

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): If it will help the House, Mr. Speaker, I have heard what the right hon. Member for Manchester, Gorton (Mr. Kaufman) said, and I shall draw the attention of my right hon. Friend the Secretary of State for the Home Department to the allegations.

Mr. Alan Williams: rose—

Mr. Speaker: Well, does it relate to the point of order?

Mr. Williams: It relates to it and it concerns you, Mr. Speaker. While we welcome what the Leader of the House has just said, you will recollect, Mr. Speaker, that on Friday you were put in an invidious position because of the issue of a statement on a point of order. I do not want to resurrect that issue, but half an hour before that statement was made on a point of order, which means that it is not available for questioning in the House, it was circulating—

Mr. Speaker: Order. We cannot go back on what happened last Friday, with the best will in the world. This is Tuesday.

Mr. Williams: But, Mr. Speaker, you are saying that it is wrong for the Government to issue information to the press before it is issued to the House. We had an instance when you were put in an embarrassing position because a Minister did that. You will recollect that the Minister of State, Treasury had asked you and the House for permission to make a statement on the Friday about the Civil Service. That statement had been released to the press over an hour before it was made in the House. While the assurance that we have had from the Leader of the House is welcome, it does not touch on the basic issue, which is that the Government are putting you and the House in an embarrassing position.

Mr. Speaker: We must not go back over the events of last Friday, but I repeat what I said then: the making of a statement by way of a point of order is to be deprecated and should not be followed in future. As I understand it, the press release was given from the Prime Minister's office and not by the Leader of the House — [HON. MEMBERS: "Oh."]—as I understand it.

Freedom of Speech (Universities and Institutions of Higher Education)

Mr. Fred Silvester: I beg to move,
That leave be given to bring in a Bill to safeguard the right of free speech in universities and institutions of higher education, including student unions; to establish the duties and powers necessary for the enforcement of this right; and for connected purposes.
The Bill should not be necessary and it is sad that it is. Free speech is central to universities and institutions of higher education. They, above all, should be looking for the widest possible boundary of free speech. It is there that new and old ideas should be put to the test and we should be able to think the unthinkable. That tradition has been widely challenged, especially in student unions, by the adoption of the practice known as the low platform policy. That means, in effect, that persons who hold views different from those who adopt such a policy are refused the opportunity to express those views within the precincts of the university.
All sorts of means are used to enforce the policy. Violence, blockades, megaphones, noise, spitting and the throwing of objects have been used in a most disgraceful manner. That has eaten into university traditions.
The right of free speech at universities is no more extensive than it is outside them. It is bound by the law of slander and the law against incitement to violence and racial hatred. If there were a need further to limit that law, it should be done in the House and not by a gang of Fascists masquerading as university students.
That practice is now widespread. There have been a number of examples in the city of Manchester. On 1 March last year, a leaflet was put out to prevent my right hon. and learned Friend the Member for Richmond, Yorks (Mr. Brittan) from speaking. The leaflet clearly says that he should be prevented from speaking. At the same university, my right hon. Friend the Member for Henley (Mr. Heseltine) has been daubed with red paint. Recently, my hon. and learned Friend the Minister of State, Home Office was attacked and prevented from speaking. That matter is now under investigation.
Incidents occur not only in Manchester. Alas, they are now widespread throughout the country. In Nottingham, the South African ambassador was turned back from speaking, and the Parliamentary Under-Secretary of State for Energy, my hon. Friend the Member for Wirral, West (Mr. Hunt)—not known as a rabid Right-winger—was refused access to the platform. My right hon. Friend the Chancellor of the Duchy of Lancaster was drowned out by noise and megaphones at Nottingham and Bristol. At Warwick, my right hon. Friend the Secretary of State for Education and Science was prevented from speaking. At York, my hon. Friend the Member for Luton, North (Mr. Carlisle) was prevented from speaking. My hon. Friend the Member for Billericay (Mr. Proctor) has been stopped at Bristol and Bradford. My right hon. Friend the Member for Hertsmere (Mr. Parkinson) was stopped at Kingston polytechnic. Those cases can be multiplied elsewhere.
Outside speakers are not the only people involved; students are also involved. The chairman of the Conservative Association at Swansea was banned because it was said that merely to be a Conservative was to be a

racist. In Aberystwyth, the Conservative Society was banned because it was affiliated to the Federation of Conservative Students.
This problem affects not only members of the Conservative party. The right hon. Member of Plymouth, Devonport (Dr. Owen) has been pelted at Sussex university. The most dishonourable case was at Sunderland Polytechnic, where the Jewish Society was banned on the pretext that all Zionists are racists.
From the objectionable to the absurd, Guildford law school banned the Solicitor-General on the pretext that his speaking to lawyers would cause a disturbance.
Some universities have acted and tried to tackle the matter. Warwick university imposed a fine of £30,000 on the students' union for activities against the Secretary of State. Sussex has disciplined its students, and York has taken students to court. After a shaky start and despite a sit-in, Manchester is now disciplining its students. However, those measures are not entirely satisfactory. My hon. Friend the Member for Luton, North received a letter today informing him that, despite the court action taken by the Vice-Chancellor of York, he is again banned from appearing because of fear of disruption.
What about the milk and water reaction of Bristol, Bradford, Nottingham, Sunderland poly, or the Guildford school of law? Mr. Bensley of that school was quoted in the press as saying that the visits of VIPs and controversial figures damage the college's reputation.
There are other methods of harassment. At Reading, an additional charge was made for security and insurance to allow a meeting of the Secretary of State for Education and Science. The Secretary of State asked the Committee of Vice-Chancellors and Principals of the Universities of the United Kingdom to issue guidelines, and last December it did so. The principles that have been adopted are fine. They say:
The vice-chancellor's committee urges all universities to protect and promote lawful freedom of speech and of assembly and to take effective action against conduct which infringes these vitally important rights and their lawful exercise.
That sounds fine and I fully approve, but the recommendations have too many doors through which the activists can bolt. The vice-chancellors' committee invisages that the threat of disorder should be sufficient for the vice-chancellors to ban meetings. That would be an open invitation to those who adopt no platform policies to threaten disruption as a means of preventing the meeting from taking place. The vice-chancellors see difficulties in policing, getting witnesses to attend and inviting police on to the premises and on the layout of the buildings. They envisage difficulties arising from the delegation of responsibility to the students' union. All that is a matter of priority. If the priority is to maintain freedom of speech, those are difficulties to be overcome not excuses to be paraded.
For that reason, unfortunately, I believe that it is necessary to back up the vice-chancellors' intentions with the force of law, especially as it is possible that their recommendations will be followed by the Committee of Directors of Polytechnics.
My Bill would impose a duty upon university authorities to maintain the right of free speech for all persons lawfully on their premises who wish to exercise that right within the limits of the general law. That duty would apply to the premises of student unions, which


avoids any doubt on that matter. There would be a duty on students and members of the universities to assist the university authorities in the discharge of their duty.
Obviously, it would be right and proper for universities to claim that they had taken all reasonable steps in the discharge of that duty, and the Bill provides for that. However, the Bill states that we should take into account elementary things that universities should do to qualify for having taken reasonable steps. Those steps should include a proper disciplinary code, adequate action against offenders, fines on student unions, where appropriate, arrangements properly made with the organisers of meetings and arrangements for the admission of the police, where necessary. Non-discrimination in the use of facilities by persons of different shades of opinion should also be included. The Bill provides that cancellation of or refusal to hold a meeting should not normally be accepted as reasonable exercise of the duty.
The object of the Bill is to bring the standards of the laggards up to those of the best. When students have had a chance to vote on those matters and express a view—as they have done in Swansea, York and Manchester and in the National Union of Students after what happened at Sunderland polytechnic—they have shown great sense in that they wish to expunge that vile attitude from universities. Those who stop free speech have no place in an institution of learning.
The Bill will have the widespread support of all those who have the good interests of universities and institutions of higher education at heart.

Question put and agreed to.

Bill ordered to be brought in by Mr. Fred Silvester, Mr. Gerald Bowden, Mr. David Madel, Mr. Robert Rhodes James, Mr. Andrew Rowe, Mr. William Shelton, Mr. Robin Squire, Mr. Patrick Thompson, Sir William van Straubenzee and Mrs. Ann Winterton.

FREEDOM OF SPEECH (UNIVERSITIES AND INSTITUTIONS OF HIGHER EDUCATION)

Mr. Fred Silvester accordingly presented a Bill to safeguard the right of free speech in universities and institutions of higher education, including student unions; to establish the duties and powers necessary for the enforcement of this right; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 14 March and to be printed. [Bill 80.]

Orders of the Day — Wages Bill

Orders for Second Reading read.

Mr. Speaker: I have selected the amendment in the name of the leader of the Liberal party.

The Paymaster General and Minister for Employment (Mr. Kenneth Clarke): I beg to move, That the Bill be now read a Second time.
The central purpose of the Bill is to create employment opportunities, especially for young people, but changing the rules governing wage payment, as the Bill proposes, will have other worthwhile results as well. It will not only promote employment and industrial efficiency, but will give rights to workers to ensure that they receive the wages due to them. It will help to break down barriers of status and conditions between manual and non-manual workers, and it will to a small extent reduce opportunities for crime.
The Bill is based on the central economic objective to which the Government have held since 1979 — to achieve an efficient and modern economy where economic growth is accompanied by low inflation, enabling us to compete in international markets and produce real, sustainable, productive jobs. To achieve that we need an efficient and productive private sector, not hampered by unnecessary Government-imposed regulations and restrictions. Secondly, we need an efficient labour market, where there are the minimum of constraints on the rights of employers and employees to agree to offer and accept jobs on contractual terms that suit them both.
We must recognise that social conditions change, and legislation that was perfectly acceptable, indeed extremely desirable, in one age may be quite unsuitable in another. The Bill deals with a legacy of enactments spanning 150 years that have all, in different ways, served their purpose and now need urgent change.
The Truck Acts were passed in the reign of William IV and were designed to deal with Victorian abuses where workers were paid in kind or forced to spend their wages at the company shop. Today, they are preventing desirable moves to non-cash methods of wage payment and the greater harmonisation of the conditions of manual and non-manual workers.

Mr. Robert C. Brown: The right hon. and learned Gentleman has just said that what is needed is the right of employers and employees to accept work on conditions that are acceptable to both. How can he seriously say that when he knows that this legislation will create the situation in which people will have to take jobs at £30 a week? Surely to God, this cannot be widely accepted.

Mr. Clarke: Perhaps I might first set out the objectives of the Bill and give details of the wages councils in order to refute the parody of the Bill which the hon. Gentleman has just given. There is no question of people willingly accepting wages far below what they can receive from social security.

Mr. Eric S. Heffer: rose—

Mr. Clarke: I am not on that point, and perhaps the hon. Gentleman will allow me to continue.

Mr. Heffer: Will the Minister give way?

Mr. Clarke: With the greatest respect, I am not on that point. I was making some general introductory remarks and explaining that the Bill was designed to sweep away the legacy of the past and a series of enactments designed for social conditions of a different age.
I had said that the Truck Acts dated back to 1831 and were originally designed to deal with the situation where workers were paid in tokens or were made to buy goods in company shops. Today, they are preventing a desirable changeover to non-cash methods of wage payment. Wages councils were originally designed to deal with Edwardian abuses, such as poverty wages, long hours, poor health and safety conditions. Exploitation was easy of workers who had no modern welfare state to fall back on when out of work. Today, there are shorter hours of work and some of the strictest health and safety legislation, yet wages councils are still able to regulate every last detail of the employment contract of every employee in every company in large sectors of industry.
When we look at the history of legislation on redundancy rebates, we see that these rebates were designed to encourage employers to shed labour in the 1960s when labour shortages in the overheated economy of the west midlands and elsewhere were a major impediment to growth. Today, the rebates provide a perverse public subsidy to redundancy in an age when, I imagine, we all agree that unemployment is our major economic and social problem.
I believe that when one looks at the history of the various regulations which we are reforming today, it is a perfect demonstration of the conservatism of this country and the resistance to change of any kind that we encounter in our society that we are introducing these reforms in the year 1986.
Let me explain in detail the objectives of the Bill. The first objective is to promote employment. We will do this by simplifying the wages councils orders, by removing outdated restrictions on the method of paying wages, by ensuring that growing and prospering companies do not meet an unfair share of the costs of supporting those which run into difficulties, and by ensuring that young workers can get their foot on the employment ladder by accepting jobs at wages which employers are willing to offer and they are willing to accept, without wages councils preventing the jobs from being offered by insisting on higher rates of pay. We will also ensure that wages councils think about the employment effects when they take their decisions.
The second major new reform is to provide major new rights to employees to ensure they do not suffer unlawful deductions from pay. The third objective is to reduce barriers of status between manual and non-manual workers, by removing laws which have had the undesirable effect of preventing similar terms and conditions of employment being offered to all workers. Finally, we aim, to a modest extent, to reduce crime by removing impediments to the growth of cashless pay, thus reducing opportunities for wages snatches and theft.
I shall now briefly set out what the Bill does and why, and I shall give way at appropriate moments.
The first part of the Bill deals with controls on the payment of wages. It sweeps away a host of ancient and obsolete laws, based on the Truck Acts, governing the way in which wages are paid. The most important provision

that we are sweeping away is the right of manual workers to insist on being paid in cash. We propose to remove this provision because it acts as an impediment to the spread of cashless pay, which is preferable for a variety of reasons.
First, it costs, on average, about 50p per wage payment to pay in cash. On the other hand, it costs about 4p by the cheapest non-cash method. The Act is completely out of date in the cashless society in which we live. We are steadily going over to a more cashless society. At the moment, about 39 per cent. of wage payments in Britain are made in cash, against, for example, 5 per cent. in West Germany and 1 per cent. in the United States of America. It seems ironic that long ago we ceased to pay the unemployed in cash — an unemployed person now receives his benefit by girocheque—but we retain these archaic laws for the payment of manual workers.
The other thing that will be achieved is greater security. There were about 450 reported armed robberies at factories or on offices or on the public highway in 1984, many of which were wage snatches. That figure was up by 100 on the 1983 figure. Many of those wage snatches involved great violence to workpeople in charge of money. There is always a greater risk of theft from individuals if a pay packet contains cash. From my experience at the Bar, I have known many criminals who, if only they knew it, had every reason to be grateful to the Truck Acts for the opportunities that they provide for highly profitable wages snatches in the midlands.
The age of the old law is shown by the distinction that it draws between manual labourers and other employees. Non-manual workers have never been covered by the Truck Acts and enjoy many fringe benefits that are not offered to manual workers. They do not get paid in tokens, and they do not have to go to the company shop, but they do get company cars, and they do get health insurance not usually offered by employers to manual workers, even if they want to, for fear of one of the employees invoking the Truck Acts and pointing out a breach.
This is not the only reason for differences in status, but it has tended to increase and perpetuate differences in conditions and status between white-collar and blue-collar workers which have absolutely no place in a modern industrialised society. I ought to emphasise that this part of the Bill does not take away any existing contractual right to payment in cash. It does not force any employer to change to a non-cash payment system if he does not want to.
The Bill introduces an important new and modern set of rights for workers in respect of deductions from pay. At the same time as it sweeps away the ancient provisions of the Truck Acts, new provisions will make unlawful any deduction from pay not provided for in statute, in the contract of employment or by written agreement. The Bill provides extra protection for deductions related to stock or cash deficiencies, which are limited to 10 per cent. of wages. It provides a new right of complaint to an industrial tribunal, and it provides similar controls on payments by workers to employers.

Mr. John Evans: The Paymaster General has made a point of informing the House that there is nothing in the Bill that will force an employer to change to a cashless system if he so desires. What about the


employee? Is he given any protection, so that he can refuse to accept the instruction when his employer decides to change to a cashless system?
Will the Paymaster General make the point that there have been many occasions when trade unions representing employers' work forces have entered into voluntary agreements with the employers to move to a cashless system? Why does he have to force this system on employees who may not necessarily want it?

Mr. Clarke: I expect that a growing number of companies will negotiate with their trade unions, where the work forces are unionised, before changing to a cashless system. However an employer and the bulk of employees may wish to move, the fact is that under existing legislation, a manual employee has the right to insist on being paid in cash and can point out that any other arrangement is in breach of the Truck Acts. That has held back movements in the direction of cashless pay in many industries where the bulk of the work force would be content to transfer. As the hon. Gentleman knows, on entering into agreements many unions have discovered that it pays everyone to change because the savings made by the employer can sometimes be shared with the work force.

Mr. Ken Eastham: The Minister referred to the savings that can be made. Earlier he said that the cashless system would cost 4p per transaction, whereas a cash system costs 50p per transaction. That will provide a 46p benefit. As an inducement, will the Minister instruct employers to use that money to make concessions to employees if they accept the new method?

Mr. Clarke: In modern circumstances, all those arrangements for pay should be open for discussion between the employer and his work force. The hon. Gentleman's point has not been lost on many negotiators and firms that have already made the change, but the Government do not intend to cover it in statutory form.
We shall replace the old legislation with the new rights that I have just described, which match today's society and which were broadly supported in our consultation exercise. For the first time, they provide a comprehensive, easily understood, easily enforceable and fairer set of statutory rights concerning deductions from all workers, manual and non-manual, and they give special protection to groups such as petrol station cashiers to ensure that their entire pay packets are not devoured by deductions for stock or cash shortages.
Part II, which will be the most controversial part of the Bill, deals with wages councils. Here, our main reforms are aimed at simplifying the requirements that wages councils impose on industry. We shall enable the councils to set a basic level of remuneration, basic and overtime, and a limit on deductions for accommodation, but we shall not allow them to involve themselves in every last detail of the employment relationship, as many do now. We shall take young people out of the scope of the councils. We are sure that the minima set by councils in the past have sometimes damaged the job prospects of young workers.

Mr. Dave Nellist: What evidence is there that the wage rates set for young people under the wages councils destroy jobs? What is the market level to which the right hon. and learned Gentleman

expects the ending of protections to drive wages down? Does he accept the figures provided by his Department in answer to questions from me, which show that since the Government came to office in 1979 school leavers' wages have dropped by 12 per cent. for boys and by 13 per cent. for girls while youth unemployment has trebled? Wages have decreased, but that has not created jobs for school leavers.

Mr. Clarke: Most of the reduction has taken place during the past two years, when the employment of young people has increased. Many academic studies have been carried out which, as the hon. Gentleman knows from the questions that he repeatedly asks of my Department, all come to varying conclusions on the figures. When we considered the total abolition of the wages councils last year, the academics disagreed about the precise extent to which employment would be increased by such a move. However, the academic research is backed by everyone's experience: if the pay of school leavers and other young people is set above the value that they can add to the business, if it is too close to adult rates, or if it is brought into line with adult rates too quickly, people prefer to employ older, experienced workers. That is the experience in industry.

Mr. Richard Hickmet: My right hon. and learned Friend said that wages councils will no longer cover people aged 21 or under. What effect will the proposal have on the employment of youngsters who attain the age of 21, or whatever the cut-off age may be? Will not their position be less secure?

Mr. Clarke: One can justify paying someone the adult rate when he has acquired some experience and skill and a track record of employment in a trade. If an employer is given a straight choice between an experienced adult worker who has a background of work in that trade, and a young school leaver or someone who is learning the business, and if there is no sharp distinction in pay, he will almost invariably choose the older worker. The wages councils have striven to set legal minima for young people's wages that are too close to the adult rate. They have changed to the full adult rate at too yound an age. That has also happened in many non-wages council industries as a result of national wage bargaining and bargains struck by some trade unions. The effect of that practice is to make it more difficult for youngsters to obtain jobs than would otherwise be true.

Mr. James Couchman: Is my right hon. and learned Friend aware that I still run a business, which is restrained by the exigencies of the licensed nonresidential wages council? Is he further aware that, for many years, the terms and conditions laid down by that wages council were such that they just about came to the market minima, but that during the period of inflation in the late 1970s they managed to extract wage increases and increases in terms and conditions which have now become a serious restraint on employment? Therefore, whenever I have a job vacancy, I must think hard about whether I can afford to fill it. Will not the Government's action enable employers to take a much more realistic and perhaps flexible view on employing youngsters for vacancies—[Interruption.]

Mr. Clarke: I am grateful to my hon. Friend. When Opposition Members respond by attempting to barrack an


experienced employer—no one could describe my hon. Friend as a hardhearted, Gradgrind, Victorian employer —and to ignore what is repeatedly asserted by many people in the catering, retail and other trades, that wages council orders are too complex and unintelligible, impose terms and conditions that are too expensive, and that they take young people's wages too close to adult wages, so that employing people is something that must be undertaken with care and only some yound people can be offered jobs, they damage the job prospects of many people.

Mr. John Townend: If my right hon. and learned Friend is convinced that wages council rates destroy jobs for young people and price them out of the market, is it not also possible that wages council rates could price older people out of jobs? He mentioned the young person having been trained and the employer being happy to keep him on at the higher rate when he reached the age of 21. Would that not be to the disadvantage of an adult who was untrained, who was less able and who was perhaps a member of an immigrant minority? Would it not price him out of work, too?

Mr. Clarke: As my hon. Friend knows, many of the wages council orders made for adults are lengthy and complex and purport to deal with every detail of the employment contract. Many are near-unintelligible to employer and employee when attempts are made to interpret them, and instead of setting a minimum rate below which adults should not be employed, there are increasing allegations that many wages councils have tried to set a going rate as part of ordinary negotiations. Therefore, we wish to simplify the orders so that they set only a basic minimum rate for ordinary hours, a single rate for overtime and some restrictions on deductions that can be made for accommodation. Those simplified wages council orders will be less of a deterrent to the employment of adults than the present ones.

Mr. John Prescott: Will the Paymaster General be more specific about the rates being too high? For example, a youth in hairdressing can earn £31·75 a week, or in retail, £47 a week. Does he believe that those rates are far too high to be paid to a youngster?

Mr. Clarke: For the school leaver who is starting from scratch in a trade where at first he can add no value to the business at all, and who has to be trained, some of those rates have a deterrent effect, particularly if the employer has the choice between taking on an extra young person and taking on an experienced worker from somewhere else. We believe that the right level of pay in those circumstances is the pay which the young person himself or herself wants to take in order to get some experience in the trade, and which an employer is willing to give.
It is no good the hon. Gentleman and others believing that they are protecting young people against low pay if the consequences of the provisions which they defend will actually leave a young person unemployed altogether because he or she has been priced out of the market.

Mr. Prescott: rose—

Mr. Clarke: My speech is being turned into a seminar, and I am not actually in the seminar-giving business.

Mr. Prescott: I am grateful to the right hon. and learned Gentleman for giving way. He is making extremely important points about Government judgments. If one follows the logic of what the Paymaster General is saying, we shall be back to the 19th century, where those who trained paid the employer for the privilege of being trained at the place of work. I inform the Paymaster General that that is already happening in some London hotels today.

Mr. Clarke: With the greatest respect, the reference to the 19th century is the point that I was making a few moments ago. It is true that in the 19th century, people made a payment for training. It is true also that when the wages councils, then called the trade boards, were introduced in Edwardian England, shop assistants slept under the counter, and for them the alternative to employment in that shop was destitution on the streets. Those are not the conditions that we meet now. The wages councils have moved so far beyond the original intention that they have highly elaborate wages orders and lay down detailed conditions and terms of service which price people out of a job altogether.
I have made the basic case and, I hope, explained why we are making the changes to the Truck Acts. In all the orders that we make now we require wages councils to consider explicitly the employment consequences of decisions that they take, which in my opinion is only common sense. However, as my hon. Friend the Member for Gillingham (Mr. Couchman) said, these requirements need to be written into some of the statutory conditions governing wages councils.
My hon. Friend the Member for Bridlington (Mr. Townend) asked why we retain the councils at all. Their continued existence might, in his opinion, have a damaging effect on adult employees. We are making it easier to review, and if need be to change the scope of, or to abolish, the existing councils, but we have retained the councils because the consultation process that we carried out in the summer showed that many employers and trade unions still feel a need for them.
The number of wages councils has been falling steadily for many years. There were 66 in 1953, and that figure has fallen to the present 26. The last Labour Government abolished at least eight councils between 1974 and 1979, including the road haulage council and the milk distributive council. Given that I believe that mistaken statutory minimum wage controls can damage employment, I hope that other industries will continue to be weaned away from the process of statutory pay fixing and move over to a more satisfactory arrangement.

Mr. Richard Wainwright: As the right hon. and learned Gentleman is speaking about the Secretary of State's powers to change the wages councils, will he explain to the House why he has abolished the Secretary of State's power to create new wages councils, because he has frequently reminded the House, quite rightly, that we live in rapidly changing times, with new trades and new occupations. Why should the Secretary of State's power to cover some of these be gratuitously struck from the law?

Mr. Clarke: I have to make it clear that I do not see a great role for statutory minimum wage fixing, or wage fixing at all, in today's society. It was only after consultation that we decided to retain them in those


industries where both the employers and the trade unions did not feel ready to embark on the kind of world that we are used to in other industries, where these things are freely negotiated and entered into by both parties.
I see no scope whatever for increasing the number of wages councils. I do not see the tide of economic history reversing itself. I do not think that we shall get the present number of unemployed down to an acceptable level in the immediate future. Therefore, I see no case whatever for creating new wages councils and giving rise to the risk of cutting back job prospects in more industries if we start expanding them again.
Most of the interventions have been about young persons. These proposals will allow greater freedom to negotiate a remuneration package for young workers to get them into employment. This will help young people to find jobs. The key point, which is the point on which we are divided and on which this debate will turn, is that, in our opinion, employers will not offer employment to anyone unless they are confident that the worker will be able to add at least his own value to the business. At the moment, young workers are at a disadvantage when there are older workers available who can offer greater experience and skill. The reforms will help young workers to get into jobs and to get that vital first foothold on the employment ladder.
The hon. Member for Coventry, South-East (Mr. Nellist) and others remain sceptical, and the hon. Gentleman asks about the studies. The studies have shown that the wages-councils set the rates for young workers higher, relative to older workers, than is commonly the case in the private sector and in voluntary agreements. A study comparing wages councils' rates with those in 73 voluntary agreements — a study which was conducted not by the Government but by the independent journal, Industrial Relations Review and Report, last August—found that two thirds of wages councils set a 16-year-old rate at 65 per cent. or more of the adult rate, but that half the voluntary agreements set a 16-year-old rate at 60 per cent. or less of the adult rate.
In my opinion, one of the problems in this country is the non-voluntary agreement. We have had a tendency to set school leavers' wages too high in relation to those of adults. Not only do the wages councils set young persons' wages too high in relation to adults' wages, but in some cases they tend to put the minimum age at which someone goes on to the full adult rate too low as well.

Mr. Nellist: Does the right hon. and learned Gentleman not recognise that wages councils rates for 16 and 17-year-olds as a proportion of the adult rate under those same wages councils orders are higher than for industries outside the wages councils? One does not pay bills by percentages and proportions. One pays them in pounds and pence, and for young workers in wages councils one is talking about £30 a week as compared to £60 or £70 a week. Outside those industries, unions are negotiating far higher rates of pay, and even if the proportion of young workers is lower, it means that those young workers are on £50, £60 or £70. That is the essential difference.

Mr. Clarke: Not every low-paid worker is covered by wages councils. That obviously must be general. Other workers are paid at far below the average. When a school leaver gets his first job, the value that he can add to the

business can be quite slight. The young person of today has many alternatives behind him — the back-up, the social security system, and so on—to which he can turn if the job is unacceptable. If he is justified in refusing it, it is wrong for the law to stop him.
I must point out to the hon. Member for Coventry, South-East that relatively few young workers have the family responsibility that older workers have, which is why they expect to take lower wages. For those young workers who have heavy family responsibilities —indeed, in my opinion, for the low-paid in general—that are expensive and difficult to maintain on low pay, there is support such as family income supplement, and in due course the Government will introduce the much-improved family credit system.
In my opinion, financial additions of that kind to pay are the best way to keep young workers with families in work, so that they can in due course gain experience and move on to better paid openings. It is wrong to contemplate the small number of young people with family commitments and insist that everybody is paid the statutory minimum — single or living at home or wherever they may be—with the result that they are priced out of jobs.

Mr. John Townend: Are not my right hon. and learned Friend's arguments strongly supported by the. action in recent years of the Electrical, Electronic, Telecommunication and Plumbing Union? It appreciated that the number of apprenticeships in its industries. was dropping because of high starting rates and reduced the starting rates for apprentices by 40 per cent., which resulted in a larger increase in the number of electrician apprentices, at a time when the number of those in all the other crafts were declining.

Mr. Clarke: I quite agree. As my hon. Friend and I know, the EETPU lives in a different world from that in which most of the trade unions and the Labour movement live. The EETPU lives in today's world, where we are trying to get competitive industries and improve people's job prospects. The Labour party and many in the trade union movement still live in Victorian and Edwardian England and defend the statutory provisions in a way which is quite destructive of employment prospects.

Mr. Merlyn Rees: In my constituency I have to live in 1986, and the National Union of Tailors and Garment Workers also lives in 1986. There are many problems in the tailoring industry. The union has pointed out to me that research at Cambridge in the applied economics department has shown that, when pay goes up as a result of the activities of the wages councils, there are expanded job opportunities. Have the right hon. and learned Gentleman and his officials looked at different industries and the effects of such councils in different industries, rather than dealing with them all in a blanket way?

Mr. Clarke: The National Union of Tailors and Garment Workers, and many of its employers, to be fair, live in a world in which they have known wages councils for many years, and find it difficult to contemplate a world without them. As a result of consultation, that industry is keeping its council, which will make its simplified orders.
I am familiar with the work at Cambridge, which attempted to refute another study carried out within our


Department. There is no difference in the data, but the interpretation by the academics of Cambridge differs from that made by others and, in their opinion, they make the case that increasing wages will increase employment prospects. I shall not go into the arguments now, as I am sure that we shall do so in Committee. A detailed answer to that case has been prepared by the competing academics. The Cambridge academics' theory is based on the idea that there is a shortage of employees in the tailoring and garment industry and that more women would be attracted to seek jobs in the industry if the pay were increased. I do not believe that argument, and it is not accepted. However, it is an arguable idea based on an interpretation of data from which most other academics have come up with quite the opposite conclusion.
It is clear that if the statutory minima are placed at the level at which they were in several of these trades, we shall reduce employment prospects for many people.

Mr. Richard Caborn: There has been a difference of interpretation by the Department of Employment. The Secretary of State for Employment in 1981 said the abolition of wages councils, particularly with regard to young people,
would be unlikely to lead to more than a very marginal increase in job opportunities in these categories.
While there is a difference of opinion on the survey, there is also a major difference of interpretation between the Department of Employment in 1981 and the right hon. and learned Gentleman now.

Mr. Clarke: That is an old study, and it still comes to the conclusion that there will be little more than a "marginal increase". The main difference between the various academics and others who have looked at, for example, the effect of total abolition is that they have disagreed in their results as to the extent to which there will be more jobs. Some have said that there would not be a great increase in new jobs and others have said that the increase in new jobs would be substantial. Even the report which the hon. Gentleman selected, which is one of the less enthusiastic about the reforms that we are suggesting, talks about an increase in employment, albeit marginal. We believe that it will be more substantial than that.
I have asserted the case, no doubt at sufficient length. In general terms, I ask the House to consider the reaction that it would expect employers to take to any part of the cost to their business. I do not regard labour as just another commodity, and I do not think that one can apply the rules of the market to the employment of people. However, if a system is introduced the aim of which is to put the cost of labour above that which it would otherwise be if freely entered into by an employer and an employee, by making labour more expensive people will be even less willing to take on labour and will look for labour-saving alternatives. That was not the problem in Edwardian England, or in the 1960s, but nowadays it is undoubtedly a problem when we have high unemployment. If the House means what it says about its concern for the unemployed, it should join us in repealing outdated legislation which is unintentionally restricting job opportunities.
Part III has the same purpose behind it, but deals with a different subject. Here we are limiting the payment of redundancy rebate, which is no longer a priority for public spending, to employers with fewer than 10 employees.

This does not affect the statutory right of the individual employee to receive a redundancy payment from his employer or from the Department of Employment if the employer is unable to pay it. The payment of redundancy rebates in today's conditions is simply not appropriate. Public spending committed to making it easier for people to make their work force redundant must take a lower priority than the public spending on which we are embarking, to promote new jobs in tourism and leisure, to give added support to those going into self-employment and for the initiative by which we are trying to give assistance to the long-term unemployed.
This is a Bill to promote employment. It will do this by easing the regulation of the labour market and removing burdens on employers. It will have a modest but significant effect on the employment level. It is a Bill to enable employers to employ workers under modern conditions without being hamstrung by legislation and controls that are a legacy of yesterday's problems and yesterday's social attitudes, whether the problem was the Victorian "tommy shop", the Edwardian sweatshop, or the overmanned shopfloor of the 1960s. Few Bills can claim such a wide sweep of simplifying and clarifying the accumulation of over 150 years of different sorts of controls dealing with quite different problems.
The Bill is one of the most radical acts of deregulation in wage payment ever undertaken. It replaces 13 whole Acts, over 20 orders and parts of other legal instruments with just one enactment. The Bill is an important part of the Government's strategy to create jobs and ease burdens on employers.
I shall not labour again my view of the Labour party's approach to these matters in what will obviously be its defence of the Truck Acts, wages councils, redundancy rebates and the lot. I have long suspected that a party that spends a great deal of time invoking the Tolpuddle martyrs and has a tendency to talk about the Taff Vale judgment and the strike of the match women in London in today's political scene is likely to react in a somewhat backward looking way to such things.
After looking at the debates on the Shops Bill, I have no doubt that we are likely to find some echoes of a speech made by my old hero, Lord Stockton, in the other place. He once converted me to Conservatism, and now he complains that we have lost our sense of paternalism. I have always rejected the paternalism of the Fabians, the smothering paternalism of the Webbs, and so on, but I have talked about the proposals for the family credit scheme to help those on low pay with family obligations. We certainly protect the health and safety of those at work. A modern paternalism in 1986 should be concerned, among other things, with a reduction in the burden of taxation and national insurance contributions on the pay earned by those on low wages. Protection of the weak should above all look at the employment prospects of people and the jobs that they require, and consider legislation in the light of its likely effect on the jobs in the market.
It is a rather whiskery Victorian father-figure who would defend the Truck Acts and detailed wages councils orders in 1986. The hon. Member for Kingston upon Hull, East (Mr. Prescott) does not fit the bill, but he will be using the argument of a Victorian father. The Bill is an important part of the Government's strategy to create jobs, ease burdens on employers, and tackle today's problems, and I commend it to the House.

Mr. John Prescott: The Paymaster General became less convincing as he proceeded to examine the Bill and especially when in conclusion, he quoted the rhetoric of the press statement issued by his Department. In fact, he read that statement with the least conviction.
The Minister said that he did not envisage a reversal of history but the Bill has all the signs of the 19th century — mass unemployment, the reduction of employees' rights and the reduction of trade union and collective rights at the place of work. All these rights are part and parcel of the Government's legislation because they see them as obstacles to the work of the market. The philosophy of the Minister is that the market would determine a lower rate of pay than that which is determined by legislation and thus more people would be employed at a lower rate of pay. That is the basis of the Government's approach.
We will oppose this Bill without hesitation. It is a piece of Tory legislation which talks about the rhetoric of rights and the increase of jobs. It is concerned with reducing those rights and reducing employment opportunities. The Bill has been conceived under 19th-century standards for 20th-century conditions. It continues the Government's role of denouncing international standards—they have denounced more international legislation than any other previous Government. The Bill will reduce the rights of employees and tilt the balance of power in favour of the employer.
The Bill will further increase part-time, low-paid, poverty employment of which we have seen so much in the past few years. It will reduce the wages of those who are lowest paid and will, ironically, further increase the costs for the small employer. The Bill is designed to attack the lowest paid, poorly organised sector of our work force, especially women, who are the majority of employees in the industries to which the Bill refers. It will also specifically affect the youth.
The Government have produced the Bill in the wholly unsubstantiated belief that a cut in wages, which will follow from this reduction of legislation, will lead to more jobs. There was nothing in the Minister's speech that justified that controversial assertion in favour of the legislation.
I reiterate the incontrovertible effects of the Bill. It continues to denounce international agreement on fair employment practices which all previous Governments have observed. Indeed, Lord Stockton made a number of judgments based on this type of legislation in the past. However, I do not intend to refer to him, as suggested by the Minister. The Government are turning the might of legislation and rights on those who are least able to bear the increasing burden. It is a process which no other Government have followed. This process was started by the right hon. Member for Chingford (Mr. Tebbit) who brought before the House the other International Labour Organisation resolution, and denounced the convention on fair wages. The process was continued with the denunciation of the rights of association.
In the Bill the Government have now denounced the convention on the Truck Acts and the convention dealing with wages councils. Of the 92 countries which signed this convention, we are the only country to denounce the international standards for maintaining decent conditions

for those who work in industries which are recognised as low paid and poorly organised. We agreed international convention standards because of these factors.

Mr. Kenneth Clarke: We have denounced those conventions because we believe we can replace them with more up-to-date legislation. However, we have ratified six new conventions and we continue to ratify conventions which, in our opinion, suit the labour needs and the needs of the unemployed and others.

Mr. Prescott: Every Government ratify all sorts of conventions—that is their purpose —but they do not accompany them with denunciations of the existing standards agreed by other countries. The Government have a terrible role when judged by other civilised countries. The Government have been referred to the Court of Human Rights for breaching rights more often than any other Government. The Government have a history of breaching fair employment practices and fair human rights as decided by convention. It is on the record for all to see.

Mr. Hickmet: The hon. Gentleman condemns the Government for renouncing those ILO agreements. Despite those agreements, the rates paid to young people by employers who stick to those agreements are lower than those maintained by many of the existing wages councils.

Mr. Prescott: Youth wages are a central issue and whether those wages are higher in this country than elsewhere. However, one needs a comparison of rates and I have never heard anyone quote the actual rates which are at issue. We have tried to get a statement from the Paymaster General—we have asked him what rate of pay he considers to be excessive for a youngster in employment. One would need to compare that rate with the adult rate, but I feel there is much rubbish talked about comparisons between those rates.

Mr. Allan Roberts: Does my hon. Friend agree that the Government's proposals to introduce Sunday trading must also be seen against the background of the Bill? Many of us, on the ground of civil liberties, might be in favour of people's right to buy and sell on a Sunday, but we cannot possibly support that when this type of legislation is introduced. This Bill will affect the wages and working conditions of the people who work in the retail trade.

Mr. Prescott: My hon. Friend has made a powerful point. The Sunday trading legislation has not yet appeared before the House, but I understand that in its progress through another place it has been made clear that the rights of youngsters not to work on Sundays—except by rights contained in the previous Shops Acts—will be denied I understand that the Government have moved an amendment to forestall the implementation of that denial for two years. How convenient that will be—after the next general election. People will not be aware that those rights are to be denied to young people. When the debate comes to this House, we will be able to explore that point more effectively.
The Bill continues to reduce the range of employees rights built up under successive Governments. The Government intend to reverse the advances of the workers. One classic example is unfair dismissal, which was brought in by Tory trade union legislation. That legislation was retained by the Labour Government but this Government now seek to reduce the rights over unfair


dismissal. The right to work is a classic right of the people but it has been denied by this Government with their massive unemployment levels of between 4 million and 5 million people.
The Minister spoke about the equality of rights and said that deductions from people's wages could be freely negotiated between the parties. The unemployment level of between 4 million and 5 million is one heck of a pressure which the employer can apply to the employee —accept the conditions or join the millions on the dole. They are not equal partners in the negotiations. Mass unemployment conditions people to accept the driving down of rates of pay which is implicit in the Bill.
Maternity rights, supplementary benefit rights and rights to take cases to a tribunal, all of which have been embodied by the House, have been nibbled away or got rid of. The Bill is in line with that process. The Government are now saying that there is a right to agree cash payments. The right hon. and learned Gentleman told us that people can now have non-cash payments enforced on them, but that they must be agreed in contract between the two parties. Does he believe that those parties are equal? The employer will say, as employers do constantly, "I am re-employing you on new conditions. If you do not like them, get out." That is happning all over the country.

Mr. Kenneth Clarke: That would be unfair dismissal.

Mr. Prescott: The Minister mutters something about unfair dismissal, but he knows that the Government have whittled away at people's rights to appear before a tribunal if there is a possible case for unfair dismissal. That applies especially to youngsters.

Mr. Clarke: Nothing in the Bill can take away from the existing contractual rights of a worker if his contract provides for payment in cash. That provision can be taken away from him only by negotiation. If there is a change in conditions of employment that makes it reasonable for him to refuse to take the change, he can claim unfair dismissal, if he had been there long enough.

Mr. Prescott: That is presumably a right that any new employee would not be able to claim because he will accept the job on the new terms, or not at all. The Minister says that the right is equal. The employer says, "You can work for me and I have a right to employ you." If the Minister had worked in industry, especially on the shop floor, or in the shipping industry, he would know that those rights are not equal at the place of work. If he had such experience, he would understand why people are so angry at his proposing to take away such rights.
Wrongful deduction of wages used to be pursuable in the county court, and the employer could be required to pay compensation. Now, however, there is some form of arbitration at a tribunal, and an employer can be required only to pay the amount that he has wrongfully deducted. More cannot be taken but, as we know from inspections in wages councils industries, many of the industries defy the legislation and therefore gain. There is a maximum fine of £400. The Bill does not change that, yet the industries have saved many thousands of pounds, as the right hon. and learned Gentleman has admitted in parliamentary answers.
There is another right to which the Minister did not address himself—the right to be paid what is called a

fair wage. There might be arguments about how to assess a fair wage. There is a European social charter which says that even youngsters and apprentices are entitled to a fair wage. There is a judgment about how to arrive at a figure. Wages councils determine a fair wage for youngsters as a proportion of adult earnings but now, only market forces will determine fairness. It terrifies me to think what some Conservative Back Benchers would pay youngsters. The experience of the hon. Member for Bridlington (Mr. Townend) is well known.

Mr. Eastham: In Europe, to help determine a fair wage, they speak of a decency threshold. Does my hon. Friend agree that such words are not used in Britain any more?

Mr. Prescott: I am grateful to my hon. Friend. The European charter defines the decency threshold at a rate of about £109 a week for an adult. If that is the European standard, the proportionate wage for youngsters here is extremely low. [Interruption.]
The Minister may mumble, but he is a member of a Government that have ratified conventions which aim to ensure fair wages. If there is a fundamental difference between us, it is that we do not believe that market forces will determine a fair wage. The result will be a wage below what legislation dictates. The Minister does not argue that the removal of legislation will allow wages to increase. Everybody knows that they will drop. There is considerable evidence to support that view.
I find it difficult to understand why the Government are so selective. They are vindictive when choosing who will suffer. Their justification is that there is a burden on industry. It is nothing to do with justice or rights, but relates to costs to the employer and unfair burdens on industry. The logical conclusion of their argument is that if employers can get free labour—it nearly is that with the youth training scheme — they will. The Minister might argue that that is a fair cost.

Mr. Robert Atkins: Trade union rates are paid on YTS.

Mr. Prescott: I hope that nobody will suggest that. It is not even the rate paid by the Labour Government in 1978 on similar schemes. I hope that we do not hear any argument about the fair or trade union rate, which would be much higher. The Bill is about dragooning those on YTS into slave labour type jobs in wages council industries.

Mr. Tony Baldry: Can the hon. Member make it clear once and for all whether the Labour Front Bench supports YTS or whether it believes that it is slave labour?

Mr. Prescott: It is amazing that the hon. Gentleman does not know that the Labour party supported the setting up of a youth training scheme and proposed a two-year scheme, with better terms of remuneration and far better quality of training. All of that has been spelt out. It was in our manifesto. Why did the hon. Gentleman not read it?
The judgment is that reducing wage costs will reduce employers' costs. If they pay less for labour, they will gain; we accept that. The argument is about whether that increases the number of jobs. We know that the young workers' scheme did not, as the Government are abandoning it. It ended up with the employer being


subsidised by the Government. It is no use the Minister shaking his head. That is why the Government are scrapping the scheme.
Since the fair wages resolution was denounced, there has been a forced reduction of about 20 per cent. in wages in hospitals and for public contracts. Holiday periods and conditions have also been reduced in the past three years. There has been a reduction in standards, in wages and in the number of jobs. In contracts negotiated by health authorities, fewer people are involved and at lower cost. Presumably the employer benefits. We are talking of rates of pay of less than £1 an hour. I cannot help observing that a barrister introduced the debate and another asked us what we think about YTS, but they are begging around for more money although they are on extremely high rates of pay. Moreover, they belong to a closed shop with a set of rules differing from that of any other closed shop, and no ballots either. Some of the Government's arguments would be more acceptable from those with experience of low pay.
Before I am challenged, I should say that I have worked in wages councils industries. I started in one—catering.I know of the weaknesses in negotiations and what it is like to be told to get out of accommodation because one does not want to work for £2 an hour, even in the days of wages councils. It is difficult to negotiate decent pay in such industries.
We should consider what is happening to the high paid. There was an article in The Observer of 10 February which talked of a City rush for golden handshakes. With regard to salaries—this is a serious point to be considered in a serious way—this is how the low-paid look at it: plenty of yap but no action.

Mr. Peter Thurnham: The hon. Gentleman speaks of minimum wage legislation without saying where the Labour party stands on it. Has he forgotten that one of his better-known predecessors in the Labour party when she was in power considered minimum wage legislation and decided that she did not want to know any more about it because it would lead to the loss of so many jobs?

Mr. Prescott: Let me declare that we believe in introducing a national minimum wage, and we will argue the case when it has been proposed. Indeed, in a memorable comment regarding wages councils, the hon. Member for Bolton, North-East (Mr. Thurnham) said:
If sweatshops are synonymous with wealthshops, I am all in favour of this country becoming a wealthshop where by the sweat of our brow, we can once again become the workshop of the world."—[Official Report, 26 March 1985; Vol. 76, c. 404.]
That is the language of the 19th century, so I hope I will hear less from the Conservatives about a minimum wage.
What we find equally offensive are the excessive amounts of money—I believe that even the Prime Minister referred to this—which are currently being made in the City, whereby eight dealers in one share dealing get £280,000 a year. That is more in one hour than most people in wage councils get in a week. I happen to think that that is not fair. I do not know what Conservative Members think.
I find it particularly offensive when I hear people such as the CBI pushing for this kind of legislation. Was it Sir Terence Beckett who talked about nowt for nowt? That is from chief executives and directors whose pay in the last two years has gone through the roof with a massive increase in profits of something like 45 per cent. in real

terms between 1981 and 1984—over £20 billion—and an increase in value per unit of production in profitability or as a proportion of the gross national product. This is against real pay, which has gone up 2 per cent.
We hear the CBI talking about nowt for nowt and calling on the Government to do something about changing the wage relationship. I recall a CBI statement calling for changes which said:
The CBI recognises there may be concern about those on low pay. It argues that this concern, where legitimate, should be met through the social security system and not through pay. An employer can only pay the rate for the job whereas individuals' needs vary with their circumstances.
The chief executives who constitute the CBI have done very well in the last few years. The massive increase in profits, rather than going to create jobs, is a disinvestment in the economy. All that money has gone into the pay and bonus payments of chief executives in industry or, indeed, into property investment in New York. Where it has clearly not gone is into re-equipping industry to bring about the kind of productivity that results in high wages.
There has been no action by Government. The only Government action we have seen is when they came to the House in July 1985 and argued that there was justification for a top salaries review whereby, over a period, civil servants on £60,000 a year, judges and Army officers would receive something like a 17 per cent. increase. Where were the claims then about a market rate? All we heard from the Government then was that we must pay a fair wage to those people, comparable to what they would earn in similar jobs in private industry. The Minister shakes his head, but it is a matter of record—this can be seen in answers by the Prime Minister and by others—that private industry is doing very well, thank you, out of the bonuses given by Government by way of tax reductions.
The greatest claim made for the legislation is that it will create new jobs—that is, that less pay means more jobs. Again, we pushed the Minister for the evidence. The former Secretary of State for Trade and Industry, when he appeared before the Select Committee on Employment on 6 March 1985, was asked what evidence he had to show that a reduction in wages led to more jobs. He was asked:
What effect has it had on wages and what effect has it had on employment, is there anything hard on that?".
The right hon. Gentleman replied: "No." He was asked:
Would it be possible to find out?
He replied:
No, I do not think so.
Even before the Select Committe, the Department gave no evidence.
Reference has been made to the report by the Department on the clothing industry, an industry in which wages have fallen 20 per cent. for men and 13 per cent. for women, with increasing unemployment levels. The department of applied economics in an analysis of the Government's research said:
The key assumptions made by the Department were false … The Department's analysis was inadequate … Using the figures the Department should have used, the Department's cost minimising model of the industry shows that, while the rise in male minimum rates produced a small fall in employment, the far larger rise in female minimum rates increased employment by a greater percentage.
That is the very opposite conclusion from that reached by the Government.
Similar research was done into the retail industry by Wilkinson at Cambridge, and he came to a conclusion


opposite to that put out publicly by the Department. He was so annoyed at the wrongful use of his evidence that he issued a press release denouncing the Department for wrongful use of the research which it had commissioned. Why should we believe what the Minister tells us when the Government abuse such research?
The basic proposition put forward by the Chancellor was that a 1 per cent. fall in the wage rates leads to an increase of 150,000 jobs. Warwick university looked at the Treasury model and tried to determine how that conclusion had been reached. It found that the jobs created by a 1 per cent. fall totalled 15,000. Of the evidence, it said:
The estimates that we obtain reveal a much smaller employment response than that predicted by the Chancellor. Part of the difference is attributable to revisions in the Treasury model".
The Government fixed and fiddled the Treasury model, just as they do the unemployment figures, and then bring it forward as evidence of justification for the case.

Mr. Kenneth Clarke: I am following the hon. Gentleman carefully to see where his argument is taking him. Is he asserting on behalf of the Labour party all over again that there is no connection between the level of pay and the level of employment? He seems to have broadened his argument. Is that once again the basis upon which the Labour party is going to form policy?

Mr. Prescott: The Labour party readily accepts that, if minimum wages were increased 100 per cent., there may be some effects on employment. It is the consequence of legislation on low pay and jobs that we need to see justified. The range of possibilities of what would happen if one got rid of the wages councils goes from 8,000 over five years to the finding of mad Professor Minford of Liverpool, who talks about 400,000 jobs coming from the change. If the Minister would give an indication of the number of jobs he thinks are likely to be created by the legislation, we would listen with some seriousness, but he has given no such indication. The evidence which we have had in considering the problem objectively suggests that in some cases an increase in rates leads to an increase in employment.

Mr. Nellist: If the Minister is correct in his argument that high wages lead to high unemployment, will my hon. Friend accept from me that the lowest unemployment in the world would be in India and the highest in Sweden? It is investment in manufacturing industry which determines productivity, not the level of wages of workers.

Mr. Prescott: That leads me to the point that the cost to the business man may be a wage in one sense, but what about the non-wage cost? It may be an increase in investment which we have failed to get, but industry will have to carry other costs.
Under the Bill an employer will have to carry the extra cost of redundancy if he has fewer than 10 employees. Already employers are complaining. An employer may have to carry more labour than he needs because he cannot afford to make anyone redundant.
In the last few years there has also been an increase in national insurance contributions. The Government have complained about Labour Governments increasing

national insurance payments. Since 1978 the national insurance contributions paid by employers have risen by 6 per cent. but the greater increase of 52 per cent., has fallen on employees. So not only does the employee carry the greater burden of the cost, but he will have to face the possibility of a reduction in his wage.
The real reason for the Bill can be seen in the fears about its consequences. The Labour party and the TUC have produced documents about the reform of wages councils. Of course we have been calling for their reform, but the real reason for the Bill is to increase the employment of youngsters. The best evidence of that is the Cabinet papers of 1982, which I have quoted before, in which the right hon. Member for Waveney (Mr. Prior) was arguing against the proposition that control of youngsters' pay should be removed from wages councils. He gave certain evidence to the Cabinet; he said that the proposal to exclude young persons and part-time workers was a
suggestion that usually comes from small shopkeepers.
That is a very relevant point. Later, he said:
there is unlikely to be any very significant scope generally for actually paying these categories less and increasing job opportunities thereby.
He felt that if that were done it would be largely at the expense of the jobs of full-time adult breadwinners. I do not think any of my hon. Friends would disagree with those conclusions. He added:
Such substitutions would involve the higher economic costs of adult unemployment.
That is precisely the point we make. He also said:
the same inducement would be likely to lead to their dismissal on reaching adult age.
That was the conclusion of the right hon. Member for Waveney in recommending to the Cabinet that it should not take such action. He also concluded
that the exclusion of young persons and part-time workers fom the scope of wages councils would be unlikely to lead to more than a very marginal increase in job opportunities for these categories and largely at the expense of fulltime adult jobs. I am in no doubt that serious political and legislative difficulties of such a course would outweigh any conceivable benefits".
That was all thrown out by the caring capitalist, the right hon. Member for Chingford.
There are other reports to which I do not have time to refer. The Auld report thought that wages councils were necessary to protect shop workers if Sunday opening was granted. The Select Committee on Employment made it clear that, although there might be reform it could lead to a significant substitution of adult employees by youngsters.
Let the House judge me by the prediction that the legislation is to prepare the way for the removal of adult workers, mainly women, earning £40 and £50 per week and their replacement by YTS youngsters on £27 a week. The beneficial effect for the Government will be a reduction in the unemployment figures because youngsters are recorded as unemployed but most of the women do not pay national insurance contributions and will not be registered as claiming unemployment benefit. It will be yet another massaging of the unemployment figures.
We have heard Ministers reading press releases about people's rights. The position of employers is being strengthened at the expense of employees. Even the limit of 10 per cent. on deductions from the wages of garage forecourt employees will not be 10 per cent. of the gross wage but 15 per cent. of the net wage, which might be as much as £6 for someone earning £40 per week. Have


Ministers thought of the implications of such a deduction on employers who are gung-ho at the moment about what they can do to employees?
We hear great rhetoric about the rights of individuals. An employee should have the right to say that he wants his money in cash because he cannot go to the bank or cannot manage his affairs without paying bank charges. Why can the individual not exercise his right to receive his wages in cash?
We shall also be challenging the removal of the employee's right to premium paid overtime. The Bill is preparing for the abolition of overtime in shops so that that industry will be ready for Sunday opening. I am glad to see the Minister nodding. Under shops legislation, if someone works on Sunday he gets a premium payment even if he has not worked all week. Under the Bill the Minister will lay down that someone must work 30 or 40 hours a week before getting overtime. That means that Sunday work will be given to youngsters and part-timers and people who work in shops will not get the premium payments that they expect.
The Bill does not extend rights or employment opportunities. It is designed to switch the balance of advantage to the employer at the expense of those least able to afford it. The purpose is to bring down the unemployment figures. The Bill will impose 19th-century conditions on 20th-century Britain, with one law for the wealthy and another for the poor employees. It particularly singles out women and young people, those on less than £40 per week, as the obstacles to the return to full employment and prosperity.
Labour will repeal the legislation without hesitation and will put Britain back among civilised nations, where we shall observe international standards and at the same time refuse to place the greatest burden on those least able to bear it.

Mr. Tony Baldry: In an earlier debate I argued at length why I believe wages councils should be reformed, not abolished. Therefore, I am pleased that the Government, having consulted widely, have decided to reform rather than abolish wages councils. I do not intend to repeat the arguments that I advanced previously as to why reform, not abolition should take place, but I am pleased that the Government, having listened, have decided on reform in ways advocated by myself and other hon. Members.
Before coming to the specific reforms that the Government have decided to introduce, there is one misconception which it is important to dismiss. The suggestion that wages councils and minimum pay levels are necessary to tackle poverty must be cleared out of the way. There is very little correlation between low pay and poverty. The Royal Commission on the distribution of income and wealth, the Diamond commission, initiated research by Richard Layard. Professor Layard has been described by The Sunday Times as a leading Government critic. The Royal Commission concluded:
Of workers in the bottom 10 per cent. of income relative to supplementary benefit only one fifth were in the bottom 10 per cent. of hourly earnings. The reason is that the poorest workers are men with large families, many of whom earn a reasonably high wage, while most of those on the lowest pay are married women where earnings ensure that the family are not among the poorest. … a substantial proportion of low paid employees are not in poor households, and a substantial proportion of the poor are not low paid.
To put it briefly, the problems of the poor are not so much low pay as no pay. Another misconception—

Ms. Clare Short: rose—

Mr. Baldry: With respect, there is much that I want to say.

Mr. Robert Atkins: Give way.

Mr. Baldry: I shall give way at the behest of my hon. Friend.

Ms. Clare Short: We would all agree that not all of the poor in Britain are low-paid workers, but the opposite does not apply. Is the hon. Gentleman aware that of low-paid workers in Britain, those covered by wages councils are the lowest paid? Of course, 2 million out of the 2·75 million are women, and of those one in four is either a single head of household or has no other income to the household. The hon. Gentleman cannot assume that low-paid women are not in families living in poverty.

Mr. Baldry: I reiterate that poverty is as much the consequence of no pay as low pay. For example, pensioners and single parent families with no pay are the group with the highest incidence of poverty.
Another misconception which needs to be dismissed is the suggestion that somehow pay rates and levels of employment have no relationship. Ten years ago the right hon. Member for Leeds, East (Mr. Healey) said:
the number of people who have a job will depend directly on the level of pay received by those in work." — [Official Report, 6 April 1976; Vol. 909, c. 271.]
That was said by the right hon. Member for Leeds, East when he was Chancellor of the Exchequer. I should have thought that it would be common sense to everyone in the House that wages which are not earned by productivity can only cause greater inflation and result in the loss of jobs.

Mr. Eastham: The hon. Gentleman referred to a statement which was made 10 years ago. Does he believe that when that statement was made by my right hon. Friend the Member for Leeds, East (Mr. Healey) he was suggesting that the lowest paid should have even less money proportionately than those on high pay? It may be that he was alluding to something else.

Mr. Baldry: The right hon. Member for Leeds, East was clearly saying that pay levels and the number of jobs have a direct correlation. If the Labour party has not learnt that in 10 years, that is its fault and it is a great pity.
I submit that the Bill introduces two sensible reforms. The first is by limiting the wages councils' ability to set a single minimum rate and a single overtime rate. Within the rhetoric of the hon. Member for Kingston upon Hull, East (Mr. Prescott) one got the impression that the Government were abolishing wages councils. They are not. All that the Government are seeking to do for adults is to remove some of the over-complications and complexities of the wages councils at the present time.
The Department of Employment consultative paper correctly stated that, at present,
the wages orders sometimes run to 30 pages in length and apply to many different grades or categories or worker; their provisions are frequently difficult for both employers and employees to understand, with the result that many of the underpayments which occur arise from misinterpretation rather than wilful disregard of legal requirements; the rigidities of the orders inhibit employers in the development of sensible wage structures and systems of remuneration more appropriate to their businesses; the law permits the issue of orders with retrospective application


which can cause real problems, particularly for smaller employers who can be faced with increased expenditure which they had not forseen. All these burdens can inhibit the growth of small businesses in the wages council trades and thus damage employment.
Indeed, the complexity of the present wages orders issued by wages councils pose a particular problem for small businesses. For example, one order is 34 pages long and specifies 144 different rates. One can produce many examples of complexity. One can produce a page 4 ft by 2 ft which has to be pinned up—

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Gentleman is getting out of order. He should not be displaying wages council orders.

Mr. Baldry: Perhaps I should refer to —[Interruption.] I am sorry that it causes consternation to the Labour party that the size of the sack and bag wages council order—

Miss Betty Boothroyd: I can assure the hon. Gentleman that it does not cause us dismay. However, whatever is shown in the House has to be interpreted in Hansard. What the hon. Gentleman has before him cannot be interpreted in Hansard.

Mr. Baldry: The admission that the wages council orders are beyond interpretation in Hansard makes my point.
Perhaps I can quote briefly from two wages orders which apply to many people. The first is the hairdressing undertakings wages council order. Many people work as hairdressers. An employer of hairdressers has to consider no fewer than 14 categories of employee and 12 different categories of rates of pay. I should not have thought that if one walked into a high street hairdresser one would imagine that the employer, before employing someone, would have to consider whether he or she was employing an apprentice, cashier, clerical assistant, sales assistant, chargehand, clerk, receptionist, college-trained student, manager or manageress, manicurist, operative hairdresser, prospective apprentice, senior apprentice or shampooist. For each of those there may be a different rate of pay and for each of those one would have to consider whether a clerk or a receptionist means
a worker who is wholly or mainly engaged in one or more of the following activities — clerical work which includes responsibility for maintaining ledgers or wages books or preparing financial accounts of a hairdressing undertaking or of a branch or department thereof; receiving customers; arranging customers' appointments.

Mr. Couchman: Will my hon. Friend concede that to a small employer the arrival of the wages inspector is a matter for considerable concern, because the great confusion and complexity of the various orders means that many small employers have great difficulty working out precisely what the pay and conditions of their employees should be?

Mr. Baldry: The hon. Member for Kingston upon Hull, East gave the impression that there was substantial under-payment under wages councils orders. In fact, compliance with wages councils orders is generally high. When pay was checked in 1983, 93 per cent. of workers were found to have been paid correctly. However, a substantial proportion of the under-payment which does occur is doubtless due to the complexity of the orders. I

submit that there is no possible advantage to employees of having a system whereby their employers are confronted with orders as complex as many of the present wages council orders. I find it amazing that the Labour party should seek to protect a system which is so complex and which can lead to employers finding themselves constantly confused and working against the benefit of employees because under-payment is often due to the fact that it is almost impossible for employers to determine the correct rate.

Mr. Prescott: Is the hon. Gentleman putting forward the argument that as 93·7 per cent. actually pay the rates, the other 6 per cent. who do not are employers who do not understand the legislation?

Mr. Baldry: Even the Low Pay Unit has to acknowledge that
some members of the Inspectorate themselves … argue that the complexity of the orders means that, in some cases, underpayment … is genuinely due to employers' ignorance … It is not surprising that employers complain of ignorance or that technical breaches occur.
That was the evidence of the Low Pay Unit in its paper "Who Needs Wages Councils?" Therefore, even the Low Pay Unit concedes that the complexity of the present wages council orders leads to under-payment.

Mr. Prescott: Ninety-five per cent.?

Mr. Baldry: No. Ninety-five per cent. appears to comply with the wages council orders.

Mr. Prescott: That is only because they know what to comply with.

Mr. Baldry: Under-payment is often due to the complexity of the wages structure. I am surprised that Labour Members do not wish wages councils orders to be made simpler for the benefit of both employee and employer to ensure minimum standards below which no employee can fall and so that everyone can understand clearly and precisely what he is doing. That would give much more freedom to employees and employers properly to negotiate the wages and conditions that they want. In that way 12 or 14 rigid categories would not be imposed on a hairdressing establishment by an outside body. The hairdresser and his staff would be free to determine for themselves how employees should be remunerated, with the protection of a wage level below which no one could fall.
The second sensible reform that the Bill will produce is that of removing those under 21 years from the scope of wages councils. Wages council rates have almost certainly created barriers to employment by setting payments at too high a level for those under 21. The average minimum rate for young people under wages council cover is significantly higher relative to adult rates than minimum rates under national collective agreements. No fewer than 22 of the 26 wages councils pay 16-year-olds a higher proportion of the adult rate than the average proportion paid to that age group under national agreements. In some instances the youth minimum rate set by wages councils is exceptionally high. That must be set against a background where starting pay for school leavers in Britian averages 60 per cent. of adult rates, while in the rest of Europe the average is below 20 per cent.
The hon. Member for Kingston-upon-Hull, East did not deal with the point that was raised by my hon. Friend the Member for Glanford and Scunthorpe (Mr. Hickmet). My


hon. Friend asked why other countries which comply with the ILO convention, such as West Germany, pay rates to young people that are significantly lower than those paid in Britain. Youth wages as a proportion of adult wages are higher in the United Kingdom than in any other Western country, and the reason for that is simple.
For far too long there has been a conspiracy within parts of the trade union movement to keep youth wages high and the result has been to keep young people out of jobs. Given the high proportion of employees who are on the minimum rate and the high level of youth earnings relative to adult earnings, it is easy to conclude that wages councils have reduced the employment opportunities for young people and that they continue to do so. There is a clear case for removing young people from the provisions of wages councils as such a move would help to price young people back into work.
Apprentices' pay cuts can increase the chances of work. A notable deal, which has already been referred to, is the one which took place between unions and employers in the electrical contracting industry. Cutting the wages of new apprentices has given thousands more young people a chance to learn a craft. The arrangement was negotiated with the relevant trade unions. The number of apprentices in that industry has increased from 850 a year a few years ago to more than 3,200 in 1984. I should have thought that the Labour party would applaud increases in opportunities for young people that enable them to gain experience, work and training, which is what the apprenticeship agreement has produced. The employers and the unions agreed that the pay for apprentices was too high, and they acted accordingly, with the direct result that the number of apprentices has trebled.
Instead of the old fixed four-year apprenticeship terms, trainees are now tested on their attainment and can qualify considerably earlier. It is sad that this example has not been followed in other sectors of industry. Negotiations broke down within the engineering industry over one union's insistence that apprentices should enjoy a pay increase in line with that for adult workers. When one engineering company observed that it had no apprentices, the union replied that it wanted to keep rates high for young people for when the company took on apprentices in future. The reality is that if trade unions insist on youth rates remaining nearly as high as those for adults, few apprentices will be taken on. It is only by having a sensible approach to youth pay, in the same way as our continental competitors, that we shall see more young people getting into work, training and apprenticeships. For far too long there has been a conspiracy on the part of some sections of the trade union movement to keep young people out of work by keeping youth rates in an artificially high level.
In West Germany, apprentices earn between 15 and 25 per cent. of the adult wage; in Britain they earn between 50 and 60 per cent. It must be realised that the level of youth wage rates relative to the rates of other competing groups of workers is important. In September 1985, the OECD, in its "Employment Outlook", reported as follows:
Increases in relative youth wages for other than market reasons and downward rigidity in youth wages relative to those of adults have resulted in job losses for young people in some member countries.
Is that what the Labour party wants? Does it want job losses to ensue for young people? High youth wages choke off training opportunities and reduce employment opportunities for young people. It is not surprising that

employers are unwilling to employ youngsters at rates comparable to those paid to adults. If an employer has to make a choice between taking on an adult or a young person at almost the same rates, he will take on the adult. There is no incentive for an employer to recruit and provide young people with training.
The provisions within the Bill are not the draconian changes that the Labour party would have us believe. They are sensible reforms which strike the right balance between guaranteeing protection for adults in ensuring that there is a wage level below which they cannot fall and helping in the creation of new jobs. Those reforms will lead to a more sensible and rational approach to wage negotiations in the longer term and to the creation of new jobs. If so, they are well worth supporting. I support the Bill and the measures that it seeks to enact.

Mr. Richard Wainwright: I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
That this House declines to give a Second Reading to a Wages Bill almost wholly negative in its provisions which, while removing all statutory protection for young employees, do nothing to reduce youth unemployment and nothing to tackle the serious current problems of poverty wages amongst unavoidably unorganised workers, which remove the Advisory, Conciliation and Arbitration Service from Wages Council procedure, and which reduce United Kingdom protection of low-paid workers below the level maintained in most European Economic Community countries and in the United States of America.
The parts of the Bill that deal with the repeal of the Truck Acts and the ending of redundancy rebates for most employers are important, but they can be left to debate in Committee and on Report. Therefore, I shall concentrate my remarks, which will be as brief as I can contrive while covering the necessary ground, to the proposed wages council changes.
In a sense, some modest note of congratulation is due to the Government for resisting the worst of their slogan mongers and thus not abolishing the wages councils, which would have created fearful tasks for a progressive Government in due course. However, the Bill so cripples and confines the wages councils as to make it close to an abolition measure. Our amendment stresses that it is strange that the Government, who pride themselves on facing modern conditions and problems in new ways, should produce a Bill which is almost entirely negative.
I accept that there is need for reform. There is urgent need for reforming what will be the policing of this measure. Among other things, Parliament's authority suffers when legislation is deliberately under-policed and sections of society are virtually given the go-ahead to flout what Parliament has enacted, as has happened with lack of wages orders enforcement.
The operation of the wages councils also needs to be reformed. During the Liberal campaign in the 1970s against low wages I was involved with the appalling petrification of the lace finishing wages council. It had been allowed to petrify and become completely inoperative mainly because the employers, sometimes aided by the Government, had implied to the lace workers, mainly in Nottingham, that pay increases would threaten their job security. In the event, that turned out to be wholly untrue. Eventually we managed to bring back to life the lace finishing wages council, to the benefit of that industry. Reform was needed, because there was no


machinery to compel the wages council to do its job. If all sides of the council membership decided to be inactive and paralysed, the needs of the workers counted for nothing.
We should also beware when simplification is referred to as reform. The sack and bag employers may be unduly harassed by the complexity of the regulations in their industry. However, in an industry that employs expert personnel managers—for example, the catering industry — a very sharp Government draftsman is needed to ensure that the orders are proof against highly expert manipulation. Nobody can say that the catering industry—

Mr. Couchman: Will the hon. Gentleman give way?

Mr. Wainwright: I shall give way in a moment.
Nobody can say that in recent years the catering industry in this country has been repressed, that catering enterprise has been smothered and that new developments have been hindered by wages regulation. I now give way.

Mr. Couchman: I am grateful to the hon. Gentleman for giving way. Is he aware that very large sections of the catering, hotel and particularly public house trade are in the hands of very small business men who do not employ skilled personnel managers to take part in wage negotiations for the industry?

Mr. Wainwright: Wise hoteliers belong, in my experience, to a highly efficient and admirable trade association that rightly provides them with expert guidance. It would be foolish of the Government so to streamline that set of regulations as to be made an ass of by the experts who are engaged to help that admirable industry.

Ms. Clare Short: Will the hon. Gentleman give way?

Mr. Wainwright: Yes, but perhaps for the last time.

Ms. Short: Income Data Services carried out a study of the retailing and the licensed and hotel trade to which the hon. Gentleman referred. It covered 2 million out of the 2·75 million workers who are protected by wages councils and said that they were dominated by large, not to say giant, firms. If the workplace is small, that does not mean that they are not run by very large employers who are easily able to cope with the details of wages council orders.

Mr. Wainwright: I do not suggest that the smaller units in the catering industry must therefore be ignored; far from it. Fortunately, they are protected by admirable trade associations. However, the Bill is depressingly negative in that it ignores more recent forms of exploitation and quite unjustifiable low rates of pay. The Paymaster General told us that the scene has changed since the time of King William IV and since 1909 when, under Winston Churchill, wages councils were introduced by a glorious Government. However, he failed to take his own medicine and recognise that there are many relatively new industries in which pay and conditions are disgraceful and where the opportunity for workers to be organised into trade unions is very small because of the nature of the job.
For example, I am sure that many meritorious companies are sensible enough to pay their security guards well, for which they receive good service; but some security guards are very badly paid by less scrupulous

employers. They are almost impossible to unionise because of the isolated nature of their work. Another example is the launderette, as distinct from the laundry which is covered by a wages council. There are some good employers in launderettes, but others pay very meagre wages.
Contract cleaning has also experienced a great boom because of the absurd numbers game with the Civil Service reductions. The number of people directly employed in cleaning has been reduced. They were sacked from Government employment, but in many cases they were re-engaged by a contract cleaning company the following Monday, often at a lower wage. Furthermore, many branches of the leisure industries, apart from catering, pay very poor wages for the services which their employees give, in all weathers.
Why are these industries not covered? Why do the Government not adopt a new approach to try to alleviate poverty of this kind? The Treasury Bench would do well to take to heart the apposite words of the right hon. Member for Henley (Mr. Heseltine) who at Blackpool last weekend spoke to an, apparently, largely enthusiastic audience about the need for society to create the wealth with which to improve living standards. He said that it is wrong to
blame the weak when the strong fail
and
it is not the foot soldiers who lose wars.
Those words rang in my ears this afternoon when it was suggested that unemployment is caused by the activities of wages councils. It is wrong to blame the foot soldiers—

Mr. Thurnham: Will the hon. Gentleman give way?

Mr. Wainwright: No, I have given way generously until now.
I regret that the Bill contains no provision for the establishment of new wages councils. Furthermore, a highly civilised part of the Wages Councils Act 1979 is to be abolished. It provides that if employers or employees' representatives propose an extension of the wage fixing arrangements, the Advisory, Conciliation and Arbitration Service can be brought in—ACAS is cited time and again in the 1979 Act—to advise the Secretary of State. To remove the role of ACAS seems to be short sighted.
The Bill will limit the activities of those wages councils that are allowed to survive only to the setting of a single minimum hourly rate in respect of basic hours and also a single overtime rate. It is difficult to imagine anything more crude and impracticable that could be applied in the complex circumstances of most wage fixing.
I ask the Minister for Employment or the Under-Secretary of State for Employment who is to wind up the debate, to say how the Government expect to persuade independent people of experience and reputation —assuming that it is in the Government's mind to continue to have independent people on the wages councils—to accept such a crude, useless and futile task as setting only one nationwide rate for basic hours and only one overtime rate, whether it is an overtime rate for Sundays or an overtime rate for an extra half an hour at the end of the day. It can be compared with a hospital authority advertising for a consultant surgeon but adding, "The only implements available are one carving knife and one pair of scissors."


The system will fall into disrepute because of the absurd task to which the Government have chosen to limit wages councils.
As for the need for a much wider range of regional wage rates, the Government have ignored entirely the two nations that their seven years in office have created. The two different economies, as the Under-Secretary of State knows, representing as he does a relatively stricken and devastated part of the country compared with most parts of the west London area, call out for different minimum rates.
It is absurd to suggest, as clause 14(5)(a) does, that the wages councils should be obliged to consider employment and wages only in the more distressed parts of the United Kingdom. The wages councils should be obliged to consider prevailing wages rates, and living costs in all the different travel-to-work areas, thus taking account of reginal variations. [Interruption.] It is no good Conservative Members showing their ignorance of conditions in other parts of Britain by being amused. If they lived in the part of Britain in which I have worked and which I know well, they would realise that there is an enormous gulf between what is regarded as tolerable pay in parts of Yorkshire and what is regarded as tolerable pay in the extremely expensive areas of west London and parts of the home counties. The whole matter should be subject to greater scientific regional examination instead of being reduced to a mere two wage rates nationwide.
I come to the central question which has rightly occupied so much of the debate—workers under 21. A Liberal Member is entitled to say something about this because, for 20 years, we have shown that we are well aware of the appalling contribution that excessive pay increases make to unemployment. At a time when Members of the Conservative party were conspiring with the future leader of the Labour party, the right hon. Member for Blaenau Gwent (Mr. Foot), to destroy Mr. Harold Wilson's incomes policy, we insisted, as we have always done since then, that an incomes policy is an essential requirement of full employment. We need no lectures on the dangers of certain people's pay levels creating unemployment, but it is hypocrisy to suggest that provisions for young people which require a second-year apprentice hairdresser to receive £34 gross in return for a 40-hour week are doing young people out of valued employment.
The Conservatives when in opposition were loud in their complaint that, in talking about pay, it is no good talking about percentages — the absolute amount of money is what matters. All the elaborate arguments that in Britain, in certain cases, a higher proportion of adult pay for young people is the legal minimum than in other countries are beside the point in the light of the meagre amount which that arithmetic produces. A higher proportion of pathetically small minimum pay cannot be regarded as a menace.
The alliance believes that this crippling of wages councils by the exclusion of young workers will have such a destabilising effect on the competition between small firms that the net number of new jobs available for young people is likely to be less rather than more. Certainly, the number will not be significantly increased.
The CBI is not enthusiastic about the removal of young people from the scope of the Bill. If some employers are

allowed to exploit unknowing young people to the hilt, unfair competition will damage the overall prospects for youth employment by closing down good firms.
I agree that an age trap has been created. Many people will be sacked or discouraged from continuing their employment when they reach the dangerous age of 21 when they will be entitled to some modest protection. West Yorkshire, part of which I represent and where I have always lived in peace time, has the worst low pay record of all the big urban regions, even though there are a number of well-paid occupations and common-sense industrial relations in the area.

Mr. Prescott: Nowt for nowt.

Mr. Wainwright: "Nowt for nowt" was the appropriate dialect to which Sir Terence Beckett resorted in his rather unfortunate remark.
Far away from Westminster there are areas where low pay is a long-standing curse and where young people live with the culture of the work ethic. They live in non-conformist areas where there is still a faint stigma attached to vigorous and able-bodied young people who do not get a job. The idea that youngsters can be exploited without hindrance is repugnant to people of common sense, no matter which way they vote in elections.
In Yorkshire and Humberside as a whole, more than 290,000 people, many of them women and many others from ethnic minorities, have some protection — not much — with the existing wages councils structure. Although the system could be simplified and streamlined, I do not believe that it should be removed.
Let us compare Britain with the rest of the industrial world, as we must always do. The International Labour Organisation reported in 1984 that almost all industrial countries now operate minimum wages systems and that, to its knowledge, none exclude young workers. Those who talk about the United States as a paradise of deregulation and think that its magnificant job creation record is due largely to the unshackling of enterprise and letting employers rip, fail to realise that, for at least the past 20 years, there has been nationwide minimum wage regulation in the USA. My evidence shows that this is widely observed and accepted as part of the equipment of a civilised nation.
In view of all these considerations, I hope that the amendment will receive the support of hon. Members on both sides of the House. The alliance will vote against the Second Reading.

Mr. Peter Thurnham: I listened carefully to the Opposition and heard nothing to make me feel that I should alter the opinion that I held when I was a member of the Select Committee that looked into wages councils and when I dissented from the majority report that wages councils should be continued. Wages councils are nothing but a deterrent to employment. When unemployment is so high, I can see no justification for keeping them.
I congratulate my right hon. and learned Friend the Paymaster General and Minister for Employment on bringing forward this welcome legislation, and my hon. Friend the Under-Secretary of State for Employment—the hon. Member for Rossendale and Darwen (Mr. Trippier)—on his support. I am pleased that the hon. Member for Newham, North-East (Mr. Leighton) is in the


Chamber, because I think that he was not able to be with us last June for the debate on wages councils. I look forward to hearing his contribution.
The hon. Member for Colne Valley (Mr. Wainwright) referred to foot soldiers not losing wars. I point out that foot soldiers do not go on strike or have recourse to wages councils and disputes during a war. It is because the foot soldiers have been so affected by attempts to protect them from market forces that we have lost so many wars. Despite the Labour party's wish that market forces should be put on one side, the result is unemployment.
The Bill is a welcome contribution to measures to remove all restrictions on certain employment up to the age of 21. I hope that, when the Bill is considered in more detail and is put into practice, the Minister will consider whether it is needed in particular industries. It contains no provision that implies that wages councils should be continued. The hon. Member for Colne Valley seems to think that we need new wages councils for new industries, but I see no need for them. New industries have come forward without wages councils, and I believe that such interference would be the last thing they would want.
What will happen once workers reach the age of 21? If they lose their job at that age, perhaps they should be given a box of ministerial fudge to make up for the way in which the Bill attempts to strike a compromise. That compromise is unnecessary, and may exist only in words, because the Bill will make wages councils toothless by limiting them to such a degree that they will not work. We have already heard how many wages councils have fallen by the wayside, but I am satisfied that they will continue to fall by the wayside, even with the provisions of the Bill.
I remind right hon. and hon. Members of what the studies have shown. The right hon. Member for Morley and Leeds, South (Mr. Rees) has an early-day motion calling attention to the garment industry. I ask him to read carefully the Department of Employment's report on the garment industry, which showed that between 1954 and 1971 about 50,000 jobs were lost. I do not see any evidence to refute that argument, and that situation has been repeated in other industries.
The most surprising thing about the debate is the Labour party's inability to come forward with its proposals for minimum wage legislation. I asked the hon. Member for Kingston upon Hull, East (Mr. Prescott) what the Labour party was doing, and he said that it was still considering the matter. Labour Members were still considering it when we debated the matter in June. As usual the Labour party is living in the past.
When the matter was considered in 1969, a report by the Department of Employment—

Ms. Clare Short: That was in the past.

Mr. Thurnham: We are living in the past. The report was produced in 1969 and showed that a minimum wage law would create considerable unemployment, particularly in areas of great difficulty, such as Northern Ireland. Why does the Labour party continue to talk about minimum wage legislation, which is the logical progression of any wages councils legislation, and about applying it to every industry but not come forward with proposals for it? I think that it is because it would lead to job losses. Why press for it in certain industries if a case cannot be made for it in all industries?
We have already had some reference by my hon. Friend the Member for Bridlington (Mr. Townend) to the agreement between the electrical contracting industry and the electricians union. The House and the country can be greatly pleased by the actions of the electricians union in helping to keep the freedom of the press. We can congratulate the electricians union. I am proud to play a part in the electrical industry, and we can congratulate the union on an agreement for apprentices which reduced the pay from £41·63 to £27·88 per week, which had the effect of increasing the number of apprentices recruited into that industry from 850 in 1982 to 3,210 in 1984.

Ms. Clare Short: The agreement was about taking numbers of YTS trainees into the electrical industry, so the Government were paying their wages. I am sure that many jobs could be generated if the Government would pay out large sums in wages. That tells us nothing about the general question of cutting youth wages to generate jobs.

Mr. Thurnham: The hon. Lady has just made the point that we want to hear. She said that many more jobs could be generated if employers did not have to bear the full cost of the wages. That is exactly our argument, and it is applicable above all to those who are in need of training.
I started work on £4 5s a week, and yesterday I was reminded by the hon. Member for Manchester, Blackley (Mr. Eastham) that he started work on 12s a week. In those days people were not deterred from starting work and learning a trade by the wages, and employers were not deterred from taking them on by wages which were too high.
We have also heard a great deal of talk from the Opposition about the effect of market forces in creating high wages. Surely this is evidence of the fact that we should encourage market forces to allow high wages, instead of trying to deter them. To judge from the way in which the Opposition are going on, anyone would think that we needed a wages council for the City. Perhaps some poor people in the City cannot earn as much as some others. It is surprising that I have heard nothing from the Opposition about asking for a wages council for the City. It would seem that it is only some people about whom they are worried.
I regret that I cannot attend the whole debate. This is because the annual meeting of the electrical contracting industry is being held today and I have undertaken to attend it. I shall do so with great pride, in the knowledge that that industry has set an example and given encouragement to all others. I wish the Bill every success.

Miss Betty Boothroyd: The hon. Member for Bolton, North-East (Mr. Thurnham) has done a good deal of work on the operation of wages councils. I have tried to wade through this Bill before us, and I find it to be a pernicious piece of legislation. As the Paymaster General indicated in introducing it to the House, it received most notoriety for its disgraceful proposals for the reform and abolition of wages councils. I hope to deal with those proposals in a moment, but first I should like to comment on the wholly inadequate proposals in part I of the Bill.
As I understand it, part I repeals 11 Acts of Parliament, and sections from a further four items of protective employment legislation. It is very far-reaching indeed. I do not think that we can ignore part I of the Bill.
Reference has been made to the Truck Acts. Of course the Truck Acts are very old. They protected the rights of working people. One of the things that they did was to stop payment in kind for work done. They said that money had to be the reward for labour that had been exerted. Working people had a choice: they could be paid in cash, by cheque or by some other means. One effect of the repeal of the various Truck Acts and Payment of Wages Acts is that it will put the clock back. The move towards cashless pay will be encouraged, and manual workers will no longer have the long-established right to be paid in cash. That was confirmed this afternoon by the Paymaster General, in response to an intervention, when he said that any manual worker taking up a job after this Bill becomes an Act will no longer have the choice. The choice will be that of the employer, and my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) made much of that, and rightly so, in his speech. It is an erosion of the individual's rights, and a most retrograde step.
Equally important, as a corollary to this, the statutory protection offered by the Truck Act 1896 against an employer making deductions from wages has also disappeared. I think many hon. Members in all parts of the House will he familiar with individual cases which have been brought to them. Law centres have considerable experience of this, especially in relation to petrol station cashiers who face harsh deductions. The Industrial Law Journal gave the example of a cashier who worked 40 hours a week for £65, and who took home £5·60 at the end of the week after deductions because errors were deducted from earnings. Part I repeals the protection under the Truck Acts and does not replace it with statutory regulations acceptable to us.
That is hardly surprising, because the Government show little respect for employment protection legislation. The Bill falls short of providing the protection necessary in many ways. First, there is no justification for abolishing the criminal sanction against employers which is at present contained in the Truck Acts. When arbitrary deductions from wages cease to be a criminal offence, it is likely that more employers will make them. I recognise that clause 5 allows for the repayment of deductions to an employee, but only after that employee has gone to an industrial tribunal and obtained a favourable decision that the deduction was unlawful. That cannot be right. Clause 5 is too woolly and is by no means an adequate safeguard, and I ask the Minister to be more specific when he replies.
Secondly, the Bill does not provide protection for workers who are dismissed and who apply to an industrial tribunal on the ground that unlawful deductions have been made. In my view, any employee dismissed in such circumstances should be able to bring a claim for unfair dismissal without the need to have been in that employment for two years. There is a huge void here, and the Minister must explain it fully when he replies.
Third, in relation to clause 1, it is insufficient to provide for the deductions from wages to be made through a written term of contract. Contracts of employment which contain such terms may have been signed many years previously, and may not be in precise language. The employee may have forgotten agreeing to the contract, and may be genuinely unaware of its provisions and what it

means. The least that we can accept is that the Bill should contain provisions to enable employees who face deductions for shortfall to offset those deductions against weeks when the total wage is in balance or when there is a gain. This legislation does not contain such provisions, and it is quite unacceptable.
The blatant inadequacies in part I are only a prelude to the abhorrent nature of part II and the proposals for the reform of wages councils. We hear constantly from the Chancellor of the Exchequer and Ministers, and we have heard again today, that wages councils price workers out of jobs. I know of only one body that has had that effect on the British people —the Government. Bankrupt of ideas for industrial and economic regeneration, they have savaged the country, particularly the area of the west midlands, and reduced it to a human wasteland.
Last month, my constituency reached a new all-tame high of more than 7,000 people out of jobs. The black country towns have always been low-wage areas. It is not the wages councils that have put the people there out of work; it is Government policy that has put them on the dole.

Mr. Lewis Stevens: Does the hon. Lady agree that during the 1940s, 1950s and early 1960s many workers in the steel and associated industries in the black country were not low-paid? They may have had to work hard for their money, but some people in those industries earned good money.

Miss Boothroyd: People in the steel foundries in the black country have always worked hard for their money. I have visited all the foundries in my area, and even today in some places one cannot see 6 ft in front of one because of the dust and grime. People who have worked in those conditions have always earned their money. I do not accept that the money was good in the 1940s, 1950s and 1960s. My area has traditionally been a low-wage area. The hon. Gentleman may think that the wages there have been better than in other areas, but I do not accept that.
There is little evidence that if wages were reduced from between £65 and £72 a week, to between £55 and £62 a week it would create a significant number of jobs. If the Minister has such evidence, it is incumbent on him to let us have it. The best evidence that I could find—and I am being very generous—is that if wages councils were abolished, about 6,000 jobs would be made available. That is a generous estimate, and I have studied a great deal of evidence. To put that figure in perspective, on average unemployment, which is now well above 5,000 per constituency, it would mean only about 20 new jobs per constituency. That does not improve job prospects. It is merely a drop in the ocean. For the Government to argue that either the abolition of wages councils or reforms to remove their teeth will create jobs is not true.

Mr. Baldry: rose—

Miss Boothroyd: The hon. Gentleman has already made his comments. I hope that the House will bear with me if I consider some more simple figures.
The Low Pay Unit tells us that young males have accepted wage rises which are 23 per cent. lower than the average increases for adult males, and that the comparative figure for young women is 30 per cent. Falling wage rates among young people show no increase in employment. What has happened is that there has been a trebling of


unemployment among young people. Therefore, for the Government to base their deregulation argument on job creation is pie in the sky. It is shocking that the Government have decided to ignore the need to provide minimum wage machinery for young people. The legislation is a savage attack on the young, and underlines the Government's shameful action in abolishing employment protection machinery.
But it is not only an attack upon the young. I am also worried about the potential of clause 13. It is a dangerous clause because it allows further abolition of protection. It empowers the Secretary of State to remove individual employers from the scope of wages councils. In future it will be interesting to see which firms are released from their present obligations to employees. No doubt firms such as Trusthouse Forte and others in the catering and service industry which make considerable contributions to Tory party funds will have little trouble in persuading the Secretary of State to remove them from the scope of wages councils.
In this country one third of the work force—about 8 million people—live on or near the official poverty line. About 3 million of them are protected by wages councils. Those people are receiving between £60 and £70 a week in wages. In the past four years, of establishments visited by wages inspectors about 37 per cent. were found to be under-paying. On average, some 10,000 complaints are received each year, and of those the wages councils discovered that some 70,000 people were being underpaid.
It is scandalous that the Government can even contemplate reducing the protection of those people. The new philosophy of caring capitalism to which we were treated last week, if it means anything in practice, means the retention and strengthening of wages councils rather than their emasculation and abolition. Conservative Members—although very few have been present today —should think very carefully tonight rather than merely follow a blind rationale which has no evidence at all to support it.

Mr. Ron Leighton: The Bill is mean and repugnant and comes from a mean and spiteful Government. There has always been too wide a gap in this country in pay and wealth. Those at the top get too much and those at the bottom too little and that position is now getting much worse. There has been a pay explosion in the City of London and among company directors while the Government are taking away from those at the bottom what little they have.
For a century, wages councils have sought to give at least some little protection to the weakest and poorest in our society and the most vulnerable in the labour market. The councils seek to protect those who are unorganised, in scattered workplaces, women part-timers, home workers and ethnic minorities. All those groups are disadvantaged when compared to the rest of the work force.
No one would say that the pay of those people is anything but low. The Government's consultation document gives the figures of £63 to £73 a week. No one could say that such a pittance is a living wage. Nor could they say that the distribution of earnings has changed,

particularly for those at the bottom. Their earnings, relative to the rest, have changed little for a century. No one can say that the pay of workers in the wages councils sector has increased relative to others. The reverse is true. An answer to a question I asked on 15 January 1985 showed that in 1974 pay in the wages councils sector was 73 per cent. of that of all industries and services. In 1984, 10 years later, it had declined to only 65 per cent. The same is true of youth wages.
There is no evidence that wages councils are pushing up wages to unrealistic levels, nor is there any evidence that weakening wages councils will create more jobs. Ministers who appeared before the Select Committee on Employment could give no evidence for that. The Select Committee concluded:
The empirical evidence submitted to the Select Committee does not provide unambiguous support for the notion that the elimination of wages councils would have the sort of employment effect which would provide an overwhelming case for abolition.
The Bill has no intellectual credentials. It is not based on evidence. It rests solely on the prejudice, dogma and ideological spite of the hard Right.
The Government want even lower wages at the bottom of the heap and they pretend that that would create more jobs. However, they said that when they abolished the fair wages resolution and schedule 11 to the Employment Protection Act 1975. Again, when asked at the Select Committee, the Government were unable to say how many jobs that had created. Of course they cannot state how many, as no jobs have been created.
If low wages created jobs and economic success, we should be at the top of the European league, as our wages are the lowest. If wage cuts, especially for the lowest paid, are the key, critical variable affecting the success of the economy as a whole, why are wages lowest in the parts of the United Kingdom where unemployment is highest and vice versa? Why are wages higher in successful industries than in less successful ones? Why is Calcutta not an example of prosperity? Obviously the Government are getting other things wrong, such as the exchange rate, interest rates and their training policy. It is wrong to expect the low paid to carry the can.
There has been a salary bonanza at the top of British industry, which has spiralled out of control. That has happened especially in the City of London where salaries, and what I now understand are called financial packages, have increased by 100 per cent. in the past two years. All sorts of people receive over £250,000 a year, yet the new earnings survey showed that the poor got poorer in 1985. The bottom 10 per cent. had pay increases less than the rate of inflation and the top 10 per cent. well above that. There has been a major increase in inequality. The sharp, real cuts for the worse off have been accompanied by the highest unemployment, while the well off, who have done best, have the least unemployment.
The ideological argument is that, if wages are forced down sufficiently, they will reach a market clearing rate. That would mean that unemployment would end. There are very few outside the loony Right who would believe that. The former Under-Secretary of State for Employment, who has moved on—I do not know if this is why he moved on—said on 18 December 1985 in response to a Conservative Back Bencher:


The Government are considering the future of the wages council system. The point about young people will be taken on board, but even he will recognise that not every young person in every region will get a job at whatever level of wages." — [Official Report, 18 December 1984; Vol. 70, c. 152-3.]
Only the loony Right could believe such ideological nonsense.
That approach becomes monstrously unfair and unjust because pay and remuneration in Britain are not decided by the laws of supply and demand. Members of Parliament are a good example of that. Many more people want to become Members of Parliament than there are places. Plenty of people would be willing to be Members of Parliament for no wages at all. Where does the law of supply and demand in the market apply to Members of Parliament? Is not the same true of admirals, generals, the judiciary and civil servants?
In the higher reaches of industry, the directors merely vote each other huge salaries. The wages of most workers are covered by collective bargaining. Therefore, most people are covered by some form of institutional machinery. The proposal is not that all that should be altered and deregulated. It singles out those at the bottom where wages councils provide some kind of institutional framework to help those without organisation and attacks, deregulates and depresses them. That is absolutely monstrous.

Mr. Baldry: Surely the converse of that is true. The lowest paid will be the only group in the community to have wages council protection to ensure that there is a level below which it cannot fall. They will be the only people in the community who will get protection. It will not be removed. The hon. Member and other Opposition Members speak as if the wages councils will be abolished. With respect, they will not be abolished; rather, they will be reformed.

Mr. Leighton: They are not going to be abolished yet. The Bill is a halfway house on the way to abolition. The hon. Gentleman's point was very obscure. Normally he is perspicacious and sharp as he understands these matters well and writes pamphlets about them.
The hon. Gentleman knows as well as all hon. Members that most people's pay is not decided by the laws of supply and demand. It is covered by institutional machinery. The suggestion is not that we should abolish the institutional machinery for everybody, but that we should tamper with the minimum of institutional machinery that protects those at the bottom of the pile. That is monstrous, offensive and repugnant.
I find it particularly repugnant to listen in the House to wealthy Members with good contracts of employment, good salaries and pensions turning on the poorest and claiming that their wages must be reduced for the public good while those hon. Members stay on the gravy train.

The Parliamentary Under-Secretary of State for Employment (Mr. David Trippier): I merely wish to endorse what my hon. Friend the Member for Banbury (Mr. Baldry) said in his intervention. He made the point that we are talking about youngsters under the age of 21. My hon. Friend suggested that the hon. Gentleman is making the wrong speech in the wrong debate. He is assuming that we are going to scrap the wages council system. That is incorrect.

Mr. Leighton: I heard the point the first time it was made. The second intervention adds nothing to it.
It is doubly offensive to tackle wages councils which protect those at the bottom of the pile when the Bill comes only months after top people—top civil servants, judges and senior service personnel — were given prodigious increases in their already too high salaries. Some, like the Cabinet Secretary, received up to 47 per cent. What is it but hypocrisy to give so much to those at the top whilst depriving those at the bottom? It is obscene.
I come to the point made by the hon. Member for Banbury (Mr. Baldry) about young people. There is no justification whatever for removing young people from the protection of the wages councils. With their inexperience and their desire for a job, they are the most vulnerable of all. If the hon. Gentleman does not wish to listen to me, he may listen to the CBI which told the Select Committee:
There was little enthusiasm for the suggestion that all young workers should be excluded from coverage by wages councils.
The fairy story about young people pricing themselves into jobs has been tested. Since 1979, youth wages have been reduced, absolutely and relative to those of adults. I was told in a parliamentary answer on 16 January 1985 that between April 1979 and April 1984 the average gross earnings of males over 21 increased by 79 per cent., but those for 18 to 20-year-olds increased by only 63 per cent., and the under-18s by only 57 per cent. Youth wages had fallen by 23 per cent. in relation to male adults. Young women's pay had fallen by 30 per cent. Did it work? Did youth employment increase? The contrary happened. Youth unemployment has actually trebled. The argument is bogus.
A differential between youth and adult wages is justifiable, but there is no evidence that the differential has become too narrow. Is the argument that it should become so pronounced that it would provide an attractive cheap subistitute for adult labour, thus leading to more adult unemployment? Adult unemployment is more expensive for the state because of the difference in adult and youth benefits.
Research shows that any increase in the employment of young people, because of their cheapness as a result of their wages being forced down by their exclusion from wages councils, would be largely at the expense of adults. That is what is known as the substitution effect.
In most wages council trades, there is little difference in the jobs done by adults and young people. There would be an inducement which would be likely to lead to the dismissal of young people on reaching adult age. That is what is known as the age trap. In other words, the sack would be a 21st birthday present. What sort of early employment experience would that be for young people?
The Bill confirms to young people that the Government are their enemy. Instead of this mean and spiteful measure, the Government should be securing better access for youth labour to the main labour market by providing decent education and training rather than developing a low-wage youth unemployment sector providing cheap substitutes for adults.
The Bill aims other blows at vulnerable low-paid workers. Orders can be simplified, but that does not mean, as the Bill lays down, that there should be a single minimum rate with a single overtime rate. That could destroy paid holidays, weekend pay, shift premiums, guaranteed pay and skill differentials. What justification is there for that? Why steer the worst employers in that direction? The Bill is a halfway house towards complete abolition.
Why should workers at the bottom of the pile not be entitled to holidays like everyone else? Why remove the holiday provision? Is the Minister aware that in a number of unorganised industries not presently covered by the wages councils—the security industry and instant print shops are examples—the absence of holiday provision is by no means rare? The only purpose of including that provision is to allow holidays to be cut or eliminated. That would lead to fewer jobs. That is something about which Conservative Members should think when they have their long summer recess. They should realise that abolishing holidays for the lowest paid would increase unemployment.
Overtime rates and premium payments, except for the single rate, are to be excluded, yet the principle of higher rates for weekend working, anti-social hours and shifts has been widely accepted. Why should they be suppressed? The Government appointed the Auld committee to study the Shops Act 1950. The committee strongly recommended the retention of protection for shop workers because
of the strong likelihood of exploitation of some shopworkers in
the form of lower wages particularly for unsocial hours, and possibly in a longer working week.
The Committee said that it
set great store by the preservation of the role of wages councils in fixing … holidays and holiday pay for the retail trade.
I hope that when the Minister replies he will tell us why the Government are turning their back on the Committee that they set up.
Let us consider the Bill's requirements for a single rate of pay. In all cases where there is more than one rate, the rates must be amalgamated. What logic is there in that? Will they be amalgamated up or down? In hairdressing, for example, there is a difference of about £15 between the top and bottom rates. Are some people to be expected to take a drop of about £15 in their pay?
A single rate of pay does not allow for legitimate differentials. Why not? I thought that Conservatives believed in differentials. There is no need for all these restrictions and backward steps. If the Minister thought that wages councils were getting things badly wrong there would be nothing to stop him saying so and asking councils to make adjustments. Employers are represented on all councils and they have independent members. Wages councils should take the decisions. They should not have them imposed arbitrarily upon them by the Government.
We are sometimes told that the wages councils are no longer needed, that they are things of the past. Unfortunately, that is not so. We have already heard that the Auld committee said that they were essential in the retail trade. We hear of cases where cleaning has been privatised. ACAS suggested that we needed a new wages council for contract cleaning. There are new industries such as security, instant print shops, video shops and others where we hear reports of exploitation.
The Minister probably knows that in his area some of the worst sweatshops at the beginning of the century were in the clothing industry. It employed newly arrived immigrants. In recent years, we have had a new group of immigrants, many of whom are being exploited in back-street sweatshops which are often fire hazards, and are as bad as any at the beginning of the century.
Last week, the Paymaster General announced a mouse of a scheme by which some £8 million would be spent in

inner-city areas with high immigrant populations. The Bill will add to their employment disadvantages, because they are disproportionately represented in wages council industries. Anyone who is a woman, part of the ethnic minority, young, a part-timer or a home worker, or who works in hotels, catering, retailing, clothing or hairdressing definitely needs wages councils. One of the main reasons why we need a new Labour Government is to restore a proper system of minimum wage and employment protection for the weaker and badly exploited section of our work force.

Mr. Lewis Stevens: I welcome the Bill with relief, because I had a feeling that the wages councils would be abolished rather than reformed. I am pleased that they are to be reformed. The hon. Member for Newham, North-East (Mr. Leighton) made several points about the need for national minimum rates to protect the low paid and to prevent exploitation of new immigrants. However, will those problems be solved by wages council modification? Those problems occur with the present system of wages councils. The Bill retains the wages councils to set minimum rates. It is important that people working in our fragmented industries are protected by a minimum rate.
The Opposition have criticised the single minimum rate for ordinary hours and the single premium rate for overtime hours, but "minimum" is the operative word. There has been criticism of what people earn in the City and what other people earn, but we are discussing wages councils setting minimum rates for industry. Surely that protection is still there for those industries.
The style of the wages councils and how they are set up will not alter. Why should the minimum rate be worse than it is at present?
My hon. Friend the Member for Banbury (Mr. Baldry) mentioned simplification. That is necessary, because the present complexity of the regulations produced by the wages councils causes confusion among the people whom they are designed to protect. Well-run clothing companies, such as Abbey Hosiery with 1,000 employees in my constituency, know the regulations on health and safety, wages and the rest. Those who do not understand the regulations are the very people who could be helped by them. The hon. Member for Newham, North-East mentioned exploitation of those paid below the rates. That occurs in small companies, but not in the larger well-run companies.
If the wages councils have a limited role in setting wages, there is more chance that throughout industry people will become aware of required rates of pay and they will be more likely to stick to them. In a sample, about 37 per cent. were paid below the rate set by the wages councils, so there is already exploitation. The protection in the Bill is of the right type. It is easily understood and it will apply across the board.
Many aspects that can be interfered with by wages councils, such as working conditions and contracts of employment, are covered by health and safety and other legislation. That legislation should provide adequate protection for workers in these industries.
The majority of industries covered by the Bill are fragmented. It is still difficult to look after areas where there is no control over low wages. The minimum rates set by the wages councils are exceeded time and again by


those firms that have well-organised unions and employee associations. In the clothing industry and many others, people are paid above the minimum rate set by the wages councils. The problem does not apply to all the 2·75 million people nominally looked after by the wages councils. The affected group is much smaller.
It is important to leave the protection of the minimum rate of pay within the orbit of the wages councils. However, I have reservations about the age limit. It is easy for the Opposition to reject the idea that rates of pay for young people have an effect on jobs. If a business has the choice of using people who can contribute to the business, wages are only one of several factors that influence the decision. It is nonsense to suggest that a 21-year-old who has reached a good position in a company is not worth more to the company than he was at 16 or 17. That is the virtue of training people.
The clothing industry is a typical example. The rate of work and the production output of some well-trained people after four years or so is worth maintaining, even though a youngster would be paid less. A youngster would be pushed out if a firm had to pay him a high wage, especially during his early years in the industry. That is not an economic proposition for a company. If a company faces hard times, as many do with competition from abroad and elsewhere, it does not make sense to take the risk of a low return on the money that is invested during the early years.

Mr. Caborn: We are discussing industries that employ semi-skilled or unskilled staff. If a young person of 16 is taken on and after two years in the establishment becomes competent in the job, would the hon. Gentleman accept the scenario that 18 to 20-year-olds on a lower wage, because they are not protected by the revamped wages councils, could displace adult workers over the age of 21 because they would be paid considerably less? The history of industries that employ people under wages council regulations shows that training periods are about one to two and a half years, not the five years that has been suggested. They could very easily displace adult workers.

Mr. Stevens: I would have preferred a lower age limit of 20 years rather than 21 years. I share some of the hon. Gentleman's concern, but not to the same extent. As people progress within an industry, especially in a small business, they become more useful, so the return on investment is still present. However, I do not agree with all the hon. Gentleman's argument. People are kept on if they are useful to a business.
I believe that five years is a relatively long period, and far longer than the general training period in those industries.
Apart from that small reservation on the age limit, I believe that the general principle is right. The fragmentation of the industries that are covered by the wages councils means that the decision to employ a young person is influenced by wage rates and the return, because in many cases those industries employ few people. To employ young people is a considerable commitment by a small company.

Mr. Nellist: The hon. Gentleman talks about the abolition of wages councils for young workers, most of whom work in the shops and distributive trades. Has he seen the comments of the management of Dixons—the electronics shops — yesterday or the day before,

objecting to a two-year YTS scheme because they cannot provide enough training to keep those kids going for two years? That is precisely the point which my hon. Friend the Member for Sheffield. Central (Mr. Caborn) was trying to make.

Mr. Stevens: I am amazed that a company which should wish to train people to acquire the knowledge that they need, would reject the YTS. That is not generally the view of companies, especially small companies, which, to get the best out of people. need that training period. It is an investment in their future.
The proposed legislation on wages councils is not the dramatic anti-employee or anti-youth measure suggested by the Opposition. It provides a basic protection to adult workers and it does not completely remove the recognition of young people's needs. Many companies will pay higher wages and will reward effort. The hon. Member for Newham, North-East (Mr. Leighton) mentioned differentials, which can be negotiated and included. We should not forget that trade union and employee negotiations have a much wider scope than sole reliance on wages councils.
I am pleased that we have retained the wages councils because they act as a good guide to small businesses, which do not wish to exploit their employees, to know the normal rates that they should pay. Such businesses can say, "We know the minimum, but if we pay £5 or £10 extra to someone who does a good job, it is simply a recognition of his efforts." Removing the complexities will do nothing but good.
Some hon. Members have asked whether we should have told wages councils that they were not doing their job. During the Labour Government, some of the decisions made by wages councils caused some embarrassment to those who were trying to introduce pay norms. Wages councils have a duty to recognise the impact of their decisions on the industry and on those who come within their orbit. We have provided a much more successful pattern for the future. It will be simpler, and much easier to run and, at the end of the day, will provide basic protection. It is not a rejection of wages councils, but a simplification of the present process.
Far too much is made of the Government's attempt to get rid of some of the obstacles to employment, when all that we are trying to do is to provide a choice between cash payments and non-cash payments without causing great difficulty to employees. The contractual obligations can be worked out between employers and the work force, and the repeal of the Truck Acts can do nothing but benefit the general negotiating position. It is possible to object in theory to removing those laws, but in practice it must be good to say to people, "Our modern system is handled mainly by the bank." For most people, the option will not detract from their present rights.

Mr. Caborn: But it is not an option. The Bill will provide that an employer can deny a request for cash payment by an employee, so the option of cash payment is being removed.

Mr. Stevens: The employer can decide the matter. The general effect will be simply to remove some antiquated practices.
The Bill is a step forward in our attempt to create a better atmosphere, especially for small businesses, 10 provide simpler administration for payment of wages and


for the control of wages councils. In line with "Lifting the Burden", it must be step forward in our industrial and commercial activities.

Mr. Don Dixon: My hon. Friend the Member for West Bromwich, West (Miss Boothroyd) and I are Members sponsored by the General, Municipal, Boilermakers and Allied Trades Union, which fought so hard to stop employers paying the poverty wages imposed by wages councils. The last thing that the low-paid want today is lectures from part-time Tory Members of Parliament such as we have heard this afternoon.
When the Paymaster General introduced the Bill, he said that it was to deal with the problems of today's economic climate. What are today's problems? More than 4 million people are on the dole; crime rates are the highest that we have experienced; suicides are increasing; our manufacturing industry is collapsing round our necks; for the first time since the industrial revolution, we are importing more than we export; there is a record number of bankruptcies; the National Health Service is suffering from the turmoils of privatisation, which has resulted in hardship for patients and employees; and our education system is at a standstill with no prospect of a return to normality, because of the Government's obstinacy. Those are the problems of today, and that is what the Paymaster General should have said when he introduced this paltry Bill.
On the day on which the White Paper on employment was published, the Government announced the recommendations of the Top Salaries Review Body. One Minister stood at the Dispatch Box and accepted recommendations to increase the pay of judges, admirals and generals by up to 47 per cent., and the next Minister, who has now been banished to Northern Ireland, said that we would deratify ILO convention 26. That shows the cynicism of the Government. That is one reason why they have had to introduce this paltry Bill, which is aimed at the lowest paid.
Part II deals with the removal of those aged under 21 from the scope of the wages councils. That will affect about 500,000 young workers. The Government claim that that will create jobs, but no economic evidence supports that assertion. The truth is the reverse. My hon. Friend the Member for West Bromwich, West mentioned wages since 1979. Since then, young males have accepted wage increases which are 23 per cent. less than the average increases for male employees, and young women's pay has increased at a rate 30 per cent. lower than that of adult women. In 1984, young workers aged under 18, excluding all YTS trainees, received average wages equivalent to about 37 per cent. of the average adult wage. In 1948, 10 per cent. of 16 to 17-year-old males earned less than £38 for a full week's work, plus overtime. Those are the people who are supposed to be pricing themselves out of jobs.
Those who work in hairdressing receive paltry wages, yet they still have to pay electricity and gas bills and buy clothes and food to survive. None of the Tory Members who have spoken has experienced such conditions, although not long ago the hon. Member for Derbyshire, West (Mr. Parris) came to Newcastle and tried to live on unemployment benefit. He ran out of money before the end of the week. He was in debt by the Wednesday. He

went round the pubs in Newcastle bumming beer, because he could not afford a pint. Yet he is one of those who lecture the low-paid. Those well-heeled Members of Parliament have jobs outside here as well as their fat parliamentary salaries.
My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) referred to holiday provision. This will be the only EEC country that fails to provide legal holiday entitlements for all workers, if that is taken out of wages councils orders as the Bill suggests.
The Bill also talks about setting a single rate of pay. The first consequence is that the wages councils will have no jurisdiction over a wide range of terms and conditions, including shift premium rates of pay. The Shops Bill will force people to work on Sundays and this Bill will mean that they are not covered by wages councils, because such provision will be taken out of wages councils orders. That is how the Government are dealing with the lowest paid.
Part I relates to deductions from pay. My hon. Friend the Member for West Bromwich, West spoke about hotel and catering wages, in which young people get a lodging allowance taken from their wages. The Bill will give unscrupulous employers the chance to take all sorts of things from the employee's wages. Wages councils also deal with the cost of laundering. Again, if the Bill is passed, that will not be covered.
We shall be the first of the 94 signatories to the ILO convention to deratify. That will be a disgrace for this country internationally, because the convention concerns the lowest paid.
The northern region has recently set up a new Low Pay Unit. I pay tribute to Michael Campbell, the leader of Tyne and Wear county council, and Tom Bayliss, the chairman of the TUC northern region, whose efforts resulted in the setting up of the unit. It has said that, in addition to the region's 250,000 people out of work, nearly 500,000 people are in work but fall in the low wage category. Not many hon. Members who have spoken today have been in that situation.
As my hon. Friend the Member for Kingston upon Hull, East said, women suffer especially from the hardship of low pay because often they are the only persons in the family who can find work. Therefore, they take over the role of the breadwinner. Half the women who do part-time work in the northern region are paid less than £2 an hour, and over 60 per cent. of full-time working women are paid less than £100 a week. The official published figures show that Tyne and Wear workers are among the lowest paid in the country. That does not bear out the Government's argument that if one accepts lower wages, there will be more employment. We have the lowest wages in the country but also the highest unemployment.
The Minister has spoken about youngsters pricing themselves into work by taking lower wages. But what will happen to those whom they price out of work? Where can they go if the youngsters take lower wages? What will happen to the adults covered by the wages councils? The Bill is a charter for unscrupulous employers who will pay off the adults and employ young slave labour. That is what the Government want.
The hon. Member for Penrith and The Borders (Mr. Maclean), who has only just come in, has probably been in the Dining Room and spent more on a dinner than some young waiters receive for a week's wages. We are subsidising such meals. In my area, shipyard workers and workers skilled in heavy industry, who have unhealthy and


unsafe jobs, are still among the lowest paid in the country. That is because employers have a reservoir of the unemployed, which is forcing workers' wages down.
The Bill has nothing to do with employment. It is meant only to carry out the Government's cynical dogma. It will force youngsters to take lower wages and allow employers to pay off adults and employ youngsters. When the youngsters become 21, they will find themselves on the street.
I hope that we shall reject the Bill. My hon. Friends have expressed many fears. I fear that we shall get ourselves bogged down in technicalities. We must remember that we are talking about the lowest paid workers, who will be paid even less, and whose conditions will worsen with the effects of the Bill. I hope that some Conservative Members have a conscience and will join us in the Lobby to vote against the Bill.

Mr. Ken Eastham: The Select Committee on Employment spent many weeks on a study on the low-paid. I have no doubt that when Conservative Members originally considered the low pay issue they had made up their minds that they would abolish the wages councils. However, the evidence submitted to the Committee was so overwhelmingly against that proposal, which came not just from trade unions and workers, but from industry, that it became obvious that the Government could not be so hard-faced as to abolish wages councils. They thought that, to start with, they would take on the under-21s. I say "to start with", because I believe that the Government's ultimate intention is to abolish wages councils altogether.

Mr. David Lightbown: Hear, hear.

Mr. Eastham: I hear an hon. Member saying, "Hear, hear". I wish that he would stand up so that he can be identified, instead of grunting in the corner. I shall gladly give way if he wishes to say something.

Mr. Lightbown: It will be in the record.

Mr. Eastham: We know that 2·7 million workers, mainly women, are affected. We also realise that by and large they are not organised. They have no trade unions to fight for them. This is the consequence of the poor working conditions and the indignities that they have to suffer.
Wages councils are set up as a safety net. As the Minister insisted that the legislation would increase jobs, it is reasonable to pose a question. Why is it that the right hon. and learned Gentleman uses the lowest paid working group to create more jobs? There might be some logic in somebody on £250 or £300 a week creating more jobs, but no action is proposed for them. The Government are attacking the people who are on starvation pay.
As my hon. Friend the Member for Jarrow (Mr. Dixon) said, we shall be the first country to revoke ILO convention 26. We are a so-called civilised nation, a so-called progressive nation, but countries such as Italy, France, Germany and many others still believe that there is a case for wages councils.
Last year the Department of Trade and Industry ran a survey that was tied up with a document called "Burdens on Business". It is interesting to note that, on the analysis

of the questionnaire, only eight of the 200 companies spoke about wages councils. Of the 19 so-called burdens, wages came sixteenth in the list.

Mr. Trippier: I was the co-ordinating Minister for that report, and of those covered in the survey only a relatively small percentage were covered by the wages councils or in wages councils industries. That is the simple explanation.

Mr. Eastham: Perhaps the Minister will agree that their priorities were not as expected. By and large, the important issue was the high interest rates charged by the banks. It was not about low-paid workers. As a percentage of the finished goods, low pay was not a factor.
Evidence from Japan and Germany has shown that if one treats the employee fairly and properly there is an increase in productivity and profitability. These countries, which are pointed out to us as being so successful, state that to treat their workers properly has a benefit. When one listens to the Conservative Government, one realises that their policy is the exact reverse. We aim, but fail, to compete with Japan and Germany. Within the worker groups of the wages councils, there are a great number of black workers. They are mostly unskilled workers and are once again affected.
It is rather interesting to note that America has recognised the problems. I should like to quote from President Johnson, who made a statement about riotous outbreaks in 1968 in the United States. He said:
The only long-range solution for what is happening lies in an attack … on the conditions that breed despair and violence … ignorance, discrimination, slums, poverty, disease, not enough jobs. We should attack these conditions not because we are frightened of conflict but because we are fired with conscience … because there is no other way to achieve a decent and orderly society".
I only wish that this Government would pick up some of these messages, because danger signals are there. I spent two days in Liverpool this week with the Employment Select Committee and met some of the black groups who are in absolute despair of the policies and the complete disregard for their lot in society.

Mr. Eddie Loyden: My hon. Friend the Member for Jarrow (Mr. Dixon) made a point that should be handed on constantly to this Government —that it is in areas of low pay that high unemployment exists. I am sure that my hon. Friend was made aware of that during his visit to Liverpool. If the Conservative Government's arguments are correct there should be full employment in Merseyside, but in fact there is 22 per cent. unemployment.

Mr. Eastham: I am well aware of that, and I fully endorse what my hon. Friend says. The Government cannot ignore the direct link between poverty and wages. There is also a direct connection with ill health and premature death. These are the results of inadequate diet, clothing, heating and housing. All these are the sad effects of poverty. This legislation will contribute to and increase these problems, yet we in the Select Committee meet groups and try to convince people that we really care and want to do something about these problems.
Are wages too high? Why does it always have to be the lowest paid who have to make the sacrifices? National average pay at present is about £168 per week. However, a newspaper published on 13 January 1986 spoke of a
£24-a-week 'slave labour' probe … A 'sweat shop' laundry.


In Preston there are adults working for 60p an hour—£26 per week. The Minister said that the minimum wage for youngsters, 60 per cent. of the adult wage, is too high, yet 60 per cent. of that £26 would be about £15·60. According to the Government's analysis, that figure is too high.
I wish to relate some of the experiences that I have had in the city of Manchester. I initiated the Adjournment debate of 5 July 1984, on Phillips Rubber Limited. A constituent had come to see me who had a wife and two children and whose basic rate of pay was £48 a week. The workers negotiated a wage increase and the company's final offer was an increase of £1·92. The Advisory, Conciliation and Arbitration Service was approached, but this benevolent company rejected any proposals. These are some of the wages which the Government say are too high.
Another example of pricing oneself out of work, in modern Tory Britain, concerned a cleaning contract firm. The firm used some women as part-time cleaners. The wage for five nights work was £17·50. The management declared that it was changing that and that it would give the women £1·50 as an attendance rate to make sure that they turned up for all five nights. However it was not £1·50 extra. The management reduced the basic wage to £16 a week and the women would obtain the £17·50 only if they were good girls and made sure they were there for the five nights. These are the type of wages that one can quote.
I am pleased and proud of the fact that in the Greater Manchester area a local low pay unit has been set up. It is doing some magnificent work. It recently published a document which said:
One in three full-time workers in Greater Manchester earn less than the Council of Europe's "decency threshold" for wages. Amongst part timers four out of five earn poverty wages. Only two other major urban regions have a worse record … About 25,000 establishments are covered by wages councils in the Greater Manchester area. The vast majority of these are shops, pubs and clubs, hotels, restaurants, and cafes, hairdressers and clothing manufacturers.
It is interesting to report to the House that the low pay unit in Manchester makes observations about the cuts in wages inspectors and the consequent illegal underpayment of the minimum rates of pay. In 1984, 1,310 workplaces —5·3 per cent. of those in the region—were inspected, and 43 per cent. of all employers visited in the Greater Manchester area were found to be breaking the law. Despite the Government's strong line about law and order, there has not been one prosecution as a result of those inspections of stinking rates of pay.
I shall give just one example of a cleaner in a medium-sized contract cleaning firm in Alton, Lancashire. She was female, aged 35 and had three children at school. She worked 15 hours a week and received £1·20 an hour. It cost her £2 a week to travel to work and she had to pay for cleaning overalls, which cost another £1. She lost £3 immediately, even out of her meagre pay. These are starvation rates of pay. These are the issues about which, if the Government have a conscience, they should do something. I have a question for the Minister, and I should like answer. If low pay is the answer, why is there not full employment in India, Pakistan or Portugal, which are low-wage economies?
I was in a jobcentre in Liverpool on Monday and I observed that much the same was happening there as in Manchester. Some of the rates of pay are so insulting and

embarrassing even for employers that they no longer put the pay on the card, but say, "Wages negotiable." The Minister ought to give a directive to jobcentres through the Manpower Services Commission to say, "We are not prepared to take these adverts until the rates of pay are clearly stated." We know what "negotiable" means—the lowest wages that employers can get away with, and even that would be too much for some of them.
The Minister spoke about values. I shall never forget the Prime Minister at the last general election talking about Victorian values — Victorian values such as poverty, disease, the workhouse, rickets, fear, slums and practical slavery. Those are the values that the Government really want to return to. The Bill is Robin Hood in reverse. The robber barons are back in Britain.

Mr. Gerald Kaufman: On a point of order, Mr. Deputy Speaker. I apologise to the House for interrupting this important debate, but I wish to raise a matter which is directly related to the rights of the House.
A little while ago, in another place, amendments proposed by Lord Denning, and carried with the assistance of Lord Stockton, turned upside down, reversed and wrecked one of the principal and fundamental clauses of the Shops Bill. The amendment means that clause 2 of that Bill, instead of withdrawing Shops Act 1950 protection from all employees aged over 18, reinstates and entrenches Shops Act protection for all workers in shops, not just shop assistants. It includes all of those employed in connection with retail trades and businesses. It is a fundamental amendment to a Bill which is due shortly to come to this House.
I understand that the procedures of the other place do not permit the Government at this late stage to reverse the amendments. Therefore, when the Bill comes to this House, instead of doing what the Government originally proposed, it will entrench the rights of all workers in shops. That is the Bill which the Home Secretary will have to present for a Second Reading, unless the Government decide not to proceed. It is important for the House to know whether the Government intend to withdraw the Shops Bill as the other place has torpedoed it. If, however, the Government decide to present it to the House for Second Reading in the form in which it will come from the other place—

Mr. Deputy Speaker (Sir Paul Dean): Order. I am sorry to interrupt the right hon. Gentleman but I am not quite clear what connection there is between that Bill and today's debate in this House.

Mr. Kaufman: I am raising my point of order for two reasons. First, this is an urgent matter which has just presented itself and, secondly, it is directly relevant to the Wages Bill. The Shops Bill claims to introduce reforms recommended by the Auld committee, and the Wages Bill addresses another of the Auld committee's recommendations. That is why the matter is directly relevant and why it is appropriate and necessary to put to you, Mr. Deputy Speaker, the point of order on which I should be grateful for your ruling and advice.
The Shops Bill and the Wages Bill run in tandem. When the Shops Bill is presented to this House by the Home Secretary will he be obliged to commend a Bill


which runs in tandem with the Wages Bill and which, if it is introduced in the form in which it will leave the other place, will entrench the rights of shop workers? The Shops Bill will contain other matters about which we are worried. Will the Government be obliged to proceed with the protection of shop workers which Lord Stockton has made it necessary for them to proceed with?

Mr. Deputy Speaker: The right hon. Gentleman has already made it clear that this is largely a matter for the Government, and not for the Chair. When the Shops Bill eventually reaches this House, it will be dealt with in the form in which it then stands. As for today's debate, the House knows that we are masters of our procedure and that no event that might have taken place today in another place will in any way alter our procedure or our debate on this Bill. Of course, it is perfectly in order, if it is felt appropriate, to refer in argument in the debate on the Wages Bill to debates that may be taking place on another Bill in another place.

Mr. Kenneth Clarke: Further to the point of order, Mr. Deputy Speaker. If the right hon. Member for Manchester, Gorton (Mr. Kaufman) wants to take part in our proceedings on the Wages Bill, I am sure that the whole House will welcome his trying to catch your eye, Mr. Deputy Speaker. As for events in another place, I understand that an amendment has been carried by a majority of one against the Government. It would not be right for the Government or the House to prejudge that amendment now, but I think that it will be found on examination that it is by no means as fundamental to the objects of the Bill as the right hon. Member obviously hopes.
To my understanding it is by no means unusual, if a Bill commences in another place, for that House to amend the Bill so that it begins its progress through this House in a different form. It would be quite wrong for the Government to anticipate their reaction to amendments in another place at this time and to prejudge whatever decisions this House might want to reach in due course about the final form of the Bill. I can, however, assure the House that any suggestion that we might withdraw the Shops Bill is absurd.

Mr. Deputy Speaker: It is most unusual to debate a measure that is being debated in another place. I am very anxious that we return to the debate on the Wages Bill.

Mr. George Foulkes: In the Auld report it will be recalled that the two questions were inextricably linked—the shops legislation on the one hand and the wages councils legislation on the other. If the Government are in difficulties and would like to reconsider their position, Mr. Deputy Speaker, is it not within your power to suspend the sitting and consideration of the Bill?

Mr. Deputy Speaker: I am very surprised to hear some hon. Members of this House saying that we should be unduly influenced by what is taking place in the other House. Let us return to the debate on the Wages Bill.

Mr. Robert C. Brown: Further to that point of order, Mr. Deputy Speaker. I am in difficulty. As you know, I seek to catch the eye of the Chair in the debate and if I succeed, I intend to make specific reference to the wages council order which deals with anti-social shifts, split shifts, weekend working and night work, which have

traditionally been rewarded with extra payment. Under the Wages Bill, this will no longer be the case. One industry in which this will be felt particularly is retailing with the forthcoming—

Mr. Deputy Speaker: Order. The hon. Gentleman seems to be telling me that he has an additional argument which he wishes to use in his speech. He will be perfectly entitled to do so if he is called in the debate.

Mr. Gerard Neale: One ought perhaps to express some thanks to the right hon. Member for Manchester, Gorton (Mr. Kaufman) for having introduced into the debate some excitement and interest.
I wish to confine my remarks to what has been said particularly by the hon. Members for Manchester, Blackley (Mr. Eastham) and for West Bromwich. West, (Miss Boothroyd). Having served with the hon. Members for Manchester, Blackley and for Newcastle upon Tyne, North (Mr. Brown) on the Select Committee on Employment, I know that they care deeply about employment and unemployment matters. While they would no doubt claim for themselves a deep sincerity of purpose for the people whom they represent, in particular those who are unemployed, I think that they should not question the sincerity of purpose of my right hon. and learned Friend the Minister for Employment and my right hon. and hon. Friends on the Government Front Bench who see a different solution to the problem. It may be that one solution is more right than another, but we on the Conservative Benches are equally worried about the situation, and are determined to find ways to alleviate the problem of unemployment and to produce the best solutions.
The hon. Member for West Bromwich, West referred to the fact that the Bill was lacking in giving to those who have had unfair and unwarranted deductions made from their pay the right to appeal to industrial tribunals. I should have thought that clause 6 is quite clear on their rights in that event.
There is a fundamental difference between the two sides on this issue. The Opposition seem to believe that, because an individual, of whatever age, warrants a size of wage packet that will enable him to lead a certain way of life, however simple that may be, it is therefore possible for that wage to be met by the employer. As a Member who comes from a very low wage economy area, nobody knows better than I that businesses are not necessarily able to pay such wages. If a company is not generating sufficient profit, the work is often there to be done, but there is not the money to meet the wage expectations outlined by Opposition Members.
The Bill is refreshing in that it cuts through some of the hypocrisy and humbug surrounding employment legislation as it affects wages. The vital thrust of the Bill is that it provides for a person's work to become more attractive to a prospective employer. The hon. Member for Newcastle upon Tyne, North referred to the top salaries review body, and the fact that the Government wished to see the recommendations enacted. I do not regard the two things as being in conflict. The Government realised that in certain areas we were losing the right people simply because we were not paying enough to keep them.

Mr. Robert C. Brown: Is the hon. Gentleman aware that any Defence Minister has ever been short of suitable candidates for promotion to general, air marshal or admiral?

Mr. Neale: From personal experience of particular ranks, no. However, I know that the legal profession has a severe problem in getting the right people to take the top jobs of judges and so on.
Young people must be made attractive to employers as employees. While the employer may have work for them to do, his business may not justify his paying them the appropriate wage. Some youngsters are willing to work at the rate which the employer can offer, but to enter into such an arrangement would be immediately to break the law. This must be borne in mind.
It must be realised that, particularly in places such as Cornwall, employers are well versed in the effects of unemployment. Tourism has been mentioned. In such places as Newquay, Bude and other parts of Cornwall, employers know that unless the holidays which they are selling are competitive in price and in what they can offer with those available in Spain, they will be unable to sell them. The prices at which the holidays can be sold will affect the level of wages. Either we sell holidays at prices that people will pay or we do not sell holidays and do not employ workers. We cannot get away from that. One problem in my constituency is that often unemployment benefit is in excess of what employers can pay, so it is better financially for people to stay on the dole.
The amendments to the Truck Acts 1831 to 1940 are long overdue. It must make sense to restrict regular cash movements between banks and employers. In the United States, the movement of money from banks to employers and out to employees constitutes only about 1 per cent. of the total payroll. In Germany the relevant figure is 5 per cent. and here it is 37 per cent., with all the attendant problems of administration and wage snatches.
Let us examine those two aspects. If the administration of a business is made more simple, its products become more competitive in price. That leads to two things. Management can pay more to employees who are engaged in production or the company can become more competitive and thus increase its viability and the number of jobs it can offer. In regard to robberies, again there are tremendous additional social costs involved for people detecting the crimes, for insurance payments, for subsequent court actions, and for prison thereafter for those who are convicted.
Because of the competition that has developed among banks during the period of office of this Government, those who shift to being paid through banks find that their bank accounts are not subject to charges if they remain in credit. Also they have a 24-hour money service through cash machines. So payment of wages through banks is not inconvenient but in many ways makes life easier.
I agree with my right hon. and learned Friend's decision to restrict the role of wages councils to wages and payment matters and to rule out negotiations on many fringe benefits. Major employers tell us that they often have to carry out two sets of negotiations, one with the unions on various fringe benefits and another with wages councils. Opposition Members will no doubt say that trade unions want to get the best conditions they can for their members. One respects that view, but it constantly raises the wage factor in a business. Opposition Members may ask what

is wrong with that. When one is managing a company, one knows that only a certain wage factor can be carried as an overall cost before it starts to hit the cost of the product or service that is provided. Opposition Members must realise that. If the wages cost is too high, an employer immediately find ways of making his business more efficient. In doing so he may shed staff, so that hits the very people that the trade unions are trying to protect.
Despite what Opposition Members say, the most welcome part of the Bill deals with young people. It would be ludicrous for anyone to say that the Bill will cure youth unemployment. Of course it will not and no one is suggesting that for a single moment. Without any shadow of a doubt, however, it will help in many instances to increase the chances of young people being able to take work for which they will be paid. Some employers complain that they cannot employ some young people because of their educational standard. Other employers blame the lack of maturity of young people. But all too often employers find that young people of 16, 17 and 18 have too high an expectation of the starting wage or of the amount that they will be earning within a short time. Their expectations are so high compared with the value of the work they will be doing that employers cannot afford to employ them.
If we make a comparison between ourselves and places such as West Germany we find that apprentices in West Germany get 15 per cent. to 25 per cent. of the adult wage, whereas here it is 50 per cent. to 60 per cent. and in some cases even 75 per cent. Therefore, it is self-evident that there will be a great problem unless we reduce the amounts that young people receive.
Opposition Members get very upset when the abbreviation EEPTU is mentioned, because to them it is a rogue union at the moment. It entered into an arrangement with electrical contractors whereby the wage of apprentices was reduced from £41·63 to £27·88. As a result, between 1982 and 1984 the number of apprentices went up from 850 to 3,210. That is the example that Opposition Members should consider.
Various hon. Members have said that the Bill will do nothing to increase the number of jobs. A study carried out by the Department of Employment suggested that 50,000 jobs had been lost between 1954 and 1979 because of wages councils. According to another report, 230,000 jobs could result from the abolition of wages councils. Even a report made for the Leader of the Opposition admitted that more jobs would come. The most critical point, borne out by surveys and by my experience in my own constituency, is that if a young person is given the option of no likely job or a job at a reasonable wage, though not as good as he had hoped for, he will be pleased to take the work because he will see an opportunity to better himself.
None of my right hon. or hon. Friends sees the Bill as a cure-all for the unemployment problem, particularly for young people, but those of us who have studied the problem in our own areas are aware that work is available in many small businesses but they are restricted because of the amount that they are required by wages councils to pay. They can offer work because they have work to be done. The level of profitability in those firms is limited simply because of their turnover and the amount that they can trade. I think that the Bill will offer better possibilities for those people and in that sense what my right hon. and learned Friend is attempting to do is welcome and should be supported.

8 pm

Mr. Tom Pendry: When the hon. Member for Cornwall, North (Mr. Neale) was called, I thought that we would have a contribution from a Conservative Member which would relate to the Bill. Indeed, as the hon. Gentleman represents part of the country which has some of the lowest paid workers, one would expect him to speak up for them. That did not come through. I hope that on reflection, when reading his speech, he will realise that he did not do justice to his constituents. I hope that as many of his constituents as possible will read his remarks.
The Bill has been described by many hon. Members as repellent, repugnant or paltry, but I certainly think that it is a national disgrace. It is yet another example of the Government's attitude to the low-paid worker. We have heard about Victorian values from some hon. Members relating to what the Prime Minister said at the general election. Even in Victoriana the low-paid workers were protected in one form or another by Parliament.
When the Minister opened the debate, he said that the Bill represented progress. He was talking in a language which certainly no Opposition Member understood when he said that the Bill was about employment. If one looks at the figures produced by the hon. Member for Cornwall, North one certainly cannot argue that it is about employment. It is not, and the Government know it.
I wonder why the Government, with all their problems, are prepared to enter this fight—because that is what it will be. I do not know why they are engaging in a battle which they cannot possibly win. One could argue that they may possibly win in the next 18 months, until the general election. But do they believe that the disadvantaged—and there will be many disadvantaged as a result of the Bill —will rush to the polls to reinstate them at the next election?
Two weeks ago we debated the Social Security Bill, and in that debate we heard speech after speech which clearly demonstrated that many families in this country would be made poorer—the unemployed, single-parent families, the disabled pensioner and the student. Will those people be grateful to the Government? Of course not.
Before I come to the consequences of this legislation, I should like to draw the attention of the House to another group of people who are soon expecting to hear from the Government about their wage claim. The group of low-paid workers to whom I refer are in the National Health Service. It is not only our nurses who deserve a better deal, but the back-up workers in the Health Service—the ancillary workers. I declare an interest as chairman of the National Union of Public Employees' group of sponsored Members of Parliament, but I want to tell the House that we are not just thinking about those low-paid workers under wages council. One can argue that there are many low-paid workers who are in some ways worse off.
For example, a laundry worker in the NHS would receive £72·53 for a 40-hour week. The wages council's statutory minimum for a 39-hour week is £74. The National Health Service rate for a canteen assistant is £72·53 for a 40-hour week. The wages council's statutory minimum for a 39-hour week is £69·11. A domestic supervisor working a 44-hour week, including four hours overtime on a Sunday, would take home £88. I could relate many more of those rates of pay in the Health Service, but

I think I would be ruled out of order if I went much further. However, those rates are disgraceful, and they are being made more disgraceful by the Government; and those workers are looking to the Government in the near future to say something positive and encouraging about their wage claim.
I have already described the Bill as a disgrace because it hits at workers who have looked to successive Governments for protection. To be fair, Conservative Governments over the years, from Sir Winston Churchill down to the right hon. Member for Old Bexley and Sidcup (Mr. Heath), have regarded such workers as a worthy group of people in need of protection. When the Minister opened the debate, we heard camouflage, gloss and cant about the Bill. We all know what the Bill is about and I do not see why the Government should disguise it. After all, their leader does not disguise her approach to the poorer workers in this country. If the Prime Minister was trying to disguise it, she has not done a good job with the legislation which has been pouring out recently.
No amount of camouflage could possibly disguise the fact that those under attack by the Government are young people. People under 21 years of age will be bashed by the legislation. The effects are clear. Young people are already among the most disadvantaged in terms of wage rates. My hon. Friend the Member for Newham, North-East (Mr. Leighton) pointed that out. After today, they can look forward to being the most under-privileged youngsters in the civilised world. As the House already knows, at present one in five of all young people are covered by wages council rates of pay. By introducing the Bill the Government effectively, as the House again knows, contravene International Labour Organisation convention 26. By doing that, the Government strip young workers of the protection afforded to similar workers in competitor countries in Europe. That is another example, as was forcibly demonstrated by my hon. Friend the Member for Jarrow (Mr. Dixon), of the Government's disregard for international agreements.
We are told by Ministers that this is the price for generating new jobs. All the evidence, despite what was said by the hon. Member for Cornwall, North, suggests that the number of jobs will be very small. Even if the figure is as high as that suggested by the Government, it hardly justifies the removal of basic protection from young workers. The truth is that we are likely to see young workers exploited to the detriment not only of themselves but of many adult workers. That has already been pointed out. Those young people will be taking some of the jobs of their elders as a result of the legislation. In Thatcher's Britain we already see a proportion of male manual workers earning less than the Council of Europe's decency threshold. That has doubled since 1979 from one in 10 to one in five.

Mr. Martin M. Brandon-Bravo: rose—

Mr. Pendry: I would normally love to give way, but I shall not, because the Conservatives are scratching around for speakers. I do not see why I should give them the opportunity of an intervention. I know that some of my hon. Friends have some worthwhile contributions to make. If the hon. Member for Nottingham, South (Mr. Brandon-Bravo) understands my point, I shall go on.
The proportion of manual workers earning less than the poverty wage has increased from two thirds to four fifths


over the period that I have just mentioned. The number of families forced to rely on family income supplement to top up their low wages has trebled since 1979. In fact, a third of our total work force, according to the Council of Europe rate, are low-wage earners.
The reason why the Government will not get away with their low pay arguments from now on is because, thank God, we now have the Low Pay Unit. The House and the nation are gradually beginning to get the message about the facts of low pay. I should like to pay tribute to the work of the Low Pay Unit, especially, being a Greater Manchester Member of Parliament, to the low pay unit run by Steve Carr in Manchester. He is doing a great deal to highlight some of the problems of low pay in that low-wage area, where 25,000 establishments are covered by wages councils and the rates of pay range from between £65 and £78 per week. Even when measured against average full-time earnings of the employed within Greater Manchester, that is very low. I understand that average full-time earnings in Greater Manchester are £160 a week.
I shall give some real examples of low wages. Conservative Members may not know whether similar examples are to be found within their constituencies, but I should be surprised if there are not. A butcher, employed near Stalybridge in my constituency, who is 28 years of age and has two children, receives gross pay of £69 for a 49-hour week. That is the sort of person who will be caught by the Bill.
Another example is Albert—I shall not give his surname—who is 20 years of age. He has worked for one year in a shop at Hyde which sells cut-price household goods. He is the only member of a large family who is employed. He takes home £48 for a 48-hour week. It has been calculated that he is under-paid by 45p an hour and is owed over £800 in lost wages. The effect of the Bill, when enacted, would be to remove employees such as Albert from the scope of wages councils orders. A claim for under-payment could be made only if he were one year older.
Another example from my constituency involves a person who is a carpet fitter by trade. He was employed until Christmas by a small Tameside firm which employs 15 workers. When he was made redundant, he contacted the Greater Manchester low pay unit about obtaining redundancy pay. The result of the unit's efforts was that my constituent was able to secure a redundancy rebate of 35 per cent. That would not be open to him under the Bill.
I have given only three of many examples that I could present to the Under-Secretary of State for Employment, who is to reply to the debate. The Minister, who represents a north-west constituency, must be aware of the problems to which I am drawing the attention of the House. I am sure that when he replies he will give us his in-depth knowledge of what he has learnt from moving around the area. I know that his constituents will be taking an interest in the debate.
It is unfortunate that I do not have the Minister's attention, but I hope that he will tell us, when he replies, how he proposes to strengthen the wages councils for those who are over 21 years of age. Will he strengthen the factory inspectorate? Will he ensure that the 43 per cent. of employers in Greater Manchester who were illegally under-paying their employees in 1984 will be prosecuted? Will he ensure that it will not take 19 years on average for those making illegal payments to be prosecuted? Will he

give us a guarantee that wages councils will be beefed up to deal with injustices? The Minister must come clean when he replies. He must understand that there are many who believe that the wages councils should be more effective in future than they are now.
The low-paid and other disadvantaged groups do not have sophisticated channels of communication. They do not have plush public relations companies and they cannot present their case in the newsapers. However, they have their unions, low pay units and Labour Members, and, most of all, they have their votes. That is why the Bill will be rubbished after the next general election. They will make their complaints through the ballot box about the sort of legislation that is now pouring out from the Government. Let us hope that the Government will take note of what has been happening to the Shops Bill in another place and in Committee will produce a Bill that will not be recognised as the measure that is now before us. We shall give the Government every assistance in Committee if they wish to produce a measure that will meet the country's needs, and especially those of young workers.

Several Hon. Members: rose—

Mr. Deputy Speaker: Order. The Front Bench replies are expected to begin at about 9.20 pm and six Back Benchers still hope to contribute to the debate. I hope that contributions will be brief.

Mr. Richard Caborn: The contributions to the debate by Conservative Members have been divorced from what is happening in industries in which the low-paid are employed. The most despicable feature of the debate is the way in which the Government have tried to shift their responsibility for the mismanagement of the economy over a considerable period from themselves to the backs of low-paid workers. When industrialists talk about their problems they do not refer to wage levels. Instead, they talk about high interest charges and the manner in which the Government have prevented capital investment in British industry.
The Bill is asking the low-paid to pay for the mismanagement of the economy by the present Administration. There are many who are concerned about the low-paid, and many of the concerned are in the inner cities. I shall refer to three main areas of concern and then deal with the consultation document and the Bill. In doing so, I shall address myself to whether they have been able to advance their case.
There are many who are concerned about the reform of the wages councils, because it is recognised that in many instances the councils provide base lines for wages. The base lines are the products of discussions within individual industries. The Bill will lead to rolling in by the state and we shall not see the rolling back of intervention. Without legal minima, many of my constituents will be reduced to poverty wages. I represent an inner-city constituency which faces horrific problems, and the Bill will compound the problems.
The effect of poverty wages is apparent not merely to those who receive them. There are consequences for the local economy, as low wages reduce considerably the purchasing power of those within the local economy. The Government are trying to provide resources through their


cosmetic schemes for the inner cities, but at the same time they are withdrawing resources which could well be produced by ensuring proper wage levels for those in the inner cities.
After detailed consideration of the consultation paper and the Bill, it appears that it is the Government's fundamental premise that decreasing wages will significantly increase employment. I believe that that is a flawed premise. The Paymaster General argued that wages councils present an obstacle to the creation of more jobs and the freedom of employers to offer, and job seekers to accept, jobs which otherwise would be acceptable. The much-quoted department of applied economics of Cambridge university concluded that where wages councils have been abolished there have been no consequential benefits for those seeking employment. It found no evidence of any increase in economic efficiency and no increase in the number of jobs in the industry or industries that had been subject to wages council control. Indeed, it found significant evidence of an increase in low pay.
The Paymaster General questioned the usefulness of wages councils in the light of changes in rates of pay, employment legislation, social security and welfare provision. Rates of pay for those at the bottom end of the pay scale have not improved. Between 1973 and 1984 the earnings of full-time male workers within the lowest earnings band declined from 65·6 to 61·6 per cent. of those in higher paid employment. During the same period, many higher paid workers' earnings increased considerably. Many low-paid workers have suffered a significant decline in real earnings, while prices have risen, by between 5 and 6 per cent. per annum. The full protection that is offered to some by employment protection legislation does not extend to employees in small firms, and workers who are covered by wages councils are employed in many such firms. The poverty wages that will result from the abolition or reform of wages councils will force many of the workers involved to become dependent on the state.

Mr. Baldry: Will the hon. Gentleman give way?

Mr. Caborn: No, because Mr. Deputy Speaker has reminded the House that many other hon. Members wish to take part in this debate.
The consultative document states that employment in wages councils' industries is atypical, with two thirds of them being part-time workers and four fifths of them female. The implication is that these workers are less important and that their incomes are less crucial than those of other workers. However, many female workers are the sole breadwinners in the family and rely upon their full-time or part-time earnings to provide the crucial family income. Well over four times as many families would be below the poverty line without women's earnings in one form or another. Reform of the wages councils will have a particularly adverse effect upon such workers.
The suggestion that compliance with wages councils orders is higher than non-compliance is due to a misunderstanding. In 1983, 9,842 establishments were found to be breaking the law, but only two were prosecuted. Instead of clamping down on this criminal activity, the Government have weakened the enforcement machinery. Since 1979 the number of inspectors has been cut by one third to 119. Firms can now expect to be visited once every 19 years. However, in 1984 one third of the

establishments that were visited were found to be underpaying 18,000 workers; 15 per cent. of those whose pay was inspected were found to be underpaid.
Statements have been made, without supporting documents, that a number of studies support the view that statutory minimum rates of pay jeopardise employment. Since 1977 the number of low-paid workers has increased. Unemployment has also increased dramatically. The suggestion that further cuts in wages would reverse this trend is unsupported. The evidence from other countries, particularly Japan, suggests that increases in the number of jobs have paralleled rises in wages.
The consultative document referred to the Treasury's paper entitled "The Relationship Between Employment and Wages." It claimed that a 1 per cent. increase in average real wages resulted in the loss of 150,000 to 200,000 jobs, yet wages councils account for only 8 per cent. of the total hourly wages bill, and for even less of the total weekly wages bill. The abolition or reform of the wages councils would result in a massive fall in wages. Is that what the Government want? This information was fed into the computer by the Low Pay Unit, using the Treasury model, and it showed that in the five years following abolition or reform only 8,000 jobs would be created, which is less than half the increase in unemployment in most months. It is suggested that trades covered by wages councils offer rates of pay for young people that are higher than most employers are willing to pay. Great emphasis has been laid by Conservative Members on this suggestion.
However, since 1979 the wages of young workers have fallen sharply, compared with adult rates of pay. They represent a cut of 4 per cert. in real earnings. In 1984 young workers under the age of 18 received an average, excluding YTS, of 37 per cent. of the average adult wage. In 1981 the right hon. Member for Waveney (Mr. Prior), who was then the Secretary of State for Employment, said that the exclusion of young people and part-timers from the scope of the wages councils
would be unlikely to lead to more than a very marginal increase in job opportunities in these categories.
There seems to have been a significant shift in thinking, based upon the evidence that was available then to the Department of Employment. To remove young people from the scope of wages councils will probably lead to lower-paid young people displacing adult workers, especially women and ethnic minority workers. There is even concern on the Conservative Benches that this might happen.
Angela Galvin, who works in Sheffield's low pay unit, said:
We have been talking to young people in Sheffield who are working 10-hour days, often without a proper break, for as little as £1·20 an hour. The proposals would remove what little protection they have and cause enormous problems for adult workers. You don't need a degree in economics to realise that the employers will not hire adults if they can employ young people for a pittance.
That point has been clearly demonstrated in this debate. There is concern, even on the Conservative Benches, about the fact that 18, 19 and 20-year-olds who have had a modicum of training will be in a position to displace workers who are 21 years of age, or older.
It has also been suggested that wages councils impose considerable burdens upon employers. A recently published Department of Employment paper entitled "Burdens on Business" states that research found that only


4 per cent. of employers mentioned wages councils as having a detrimental effect upon business. The department of applied economics at Cambridge stated:
Unregulated low wage employment destabilises product markets, increases uncertainty and risk, slows down the rate of scrapping of outdated equipment and consequently reduces both the level of new investment and the profitability of new investment in high wage firms.
Many firms fear the effects of undercutting leading not only to shoddy work but to forcing firms out of business. The Contract Cleaners and Maintenance Association fear these effects and have pledged themselves not to undercut minimum NHS wage rates and conditions in Health Service contracts.
The Bill fits clearly into the Government's overall strategy for wage earners: to force down and depress wages in order to create a low-wage economy. This is to be seen in many facets of the Government's policy, whether it be the youth training scheme, or wages Bills or their attitude to industry. The Government are now attacking the lowest paid in our society.
I end with a quotation from Winston Churchill:
It is a serious national evil that any class of His Majesty's subjects should receive less than a living wage in return for their utmost exertions. It was formerly supposed that the working of the laws of supply and demand would naturally regulate or eliminate the evil. … But where you have … no organisation, no parity of bargaining, the good employer is undercut by the bad, and the bad employer is undercut by the worst."—[Official Report, 28 April 1909; Vol. IV, c. 388.]
Those words are as relevant today as they were when wages councils were established all those many years ago.

Mr. David Maclean: I wish to deal with two aspects of the Bill: first, the Truck Acts and their effect during the past century and, secondly, the general principle of pricing people into work.
The Truck Acts legislation has undoubtedly hampered the growth of all non-cash methods of wage payment. It has acted as an impediment to efficiency in British industry. Moreover, it is inconsistent with the well-established principle that terms and conditions of employment are essentially matters to be determined contractually between workers and management rather than by legislation.
The main body of the Truck Acts legislation, which comprises the four Truck Acts of 1831 to 1940 and a number of ancillary and related provisions in other Acts, was passed in the 19th century to protect manual workers from abuses associated with the payment of wages. When I listen to Opposition Members, I feel that they are still living in the 19th century. They believe that such abuses still take place. We know what some of those abuses were. The bosses, the evil capitalists, had their factory shops. Rather than pay wages to their workers, they gave them tokens that had to be spent on the grossly over-priced goods in their factory shops.
The Truck Acts, which stipulated that workers should be paid in cash, formed one of the most valuable pieces of legislation to prevent that flagrant and disgusting abuse. There is no reason to suppose that if we abolished the Truck Acts we should suddenly find that 25 million workers in this country would revert to a form of token payment or to taking payment in kind instead of insisting on cash: cash through the credit transfer system, and cash

through the cheque system. We are talking about money. The workers will still receive money rather than payments in kind. In 1983 the Government suggested that they would repeal this outdated legislation. The Bill will certainly undertake that long overdue task.
My hon. Friend the Member for Cornwall, North (Mr. Neale) cited some statistics. A much higher proportion of the working population in other countries are commonly paid through methods other than a wage packet on a Thursday night. In the United States, a much larger percentage of the population have bank accounts and use credit transfer systems. Only 1 per cent. of wage payments are made in cash. In Germany, only about 5 per cent. of wage payments are made in cash. In 1984, mainly because of the attitudes of trade unions, which were vested in the last century, 37 per cent. of wage payments in Britain were made in cash.
Can any hon. Member put up a sensible non-emotional argument on why we must have wages paid in cash in a wage packet? What is so philosophically sound or morally justifiable about a person going home with an average weekly wage of £100, £160 or £300 in cash? What is so morally wrong about transferring that cash through a credit transfer system to the bank? I would gladly listen to any hon. Member who could put up such an argument.

Ms. Clare Short: The Labour party's argument is that it should be up to the workers to negotiate. There are advantages to employers in moving to cashless pay. No one is against that, but employers should meet the wishes of their employees. This measure takes away the need for the workers to agree to the change. We believe in freedom of choice for the work force.

Mr. Maclean: That argument is rather rich. It gives those trade unions that control the work force of 9 million people a complete bar. If a large number of the workers want a credit transfer system, it will not be possible for them to get such a system. This legislation will not compel people to be paid by cheque. I accept that the change should result from freedom of choice. I know of industries where the workers have had to go behind the backs of their union bosses to get a credit transfer system. They negotiated for an extra few days pay with the management to allow them to move to a credit transfer system. They now all like that system.
There is no doubt that, on efficiency grounds, the credit transfer system is infinitely preferable to paying in cash. A tremendous cash saving can be made from paying people through credit transfers. The hon. Member for Birmingham, Ladywood (Ms. Short) suggests that we should not have this system, but I suggest that she should put it to the Sevices Committee that the House should set an example. Perhaps more people would then attend the Chamber late on a Thursday night as hon. Members queued up at the Vote Office to collect their little cash packets.

Ms. Clare Short: Will the hon. Gentleman give way, because he is misleading the House?

Mr. Maclean:: I shall not give way on this occasion. Contrary to Opposition Members, who seem never to give way, Conservative Members give way occasionally. I have given way once to the hon. Lady. I may give way later if she comes up with a reasonable point.
My main point is on fighting crime. I do not like the way the Opposition have glossed over the fact that in 1984


there were 450 reported armed robberies from factories and offices or on public highways in England and Wales. I declare an interest, because I worked for a security company which was, and still is, involved in the transfer of large amounts of cash. The Opposition quote examples of low pay in their constituencies. I can quote examples from the time when I was involved in cash deliveries. As a training officer, I dealt with the maimed and injured people who came to my classroom because they had been shot or otherwise injured during armed robberies. Too many women are widows because their husbands were engaged in cash transit work and were killed during robberies.
Unfortunately, the number of armed robberies against cash transit firms is increasing. This does not occur with just the large and well protected firms. There are too many robberies of office girls carrying the cash down to the bank in carrier bags or suitcases. It cannot be right in a modern sophisticated age to entrust the collection of wages to people who have to walk to the banks with carrier bags and suitcases for the cash. It is high time the Truck Acts were repealed.
The core of the Bill is about the removal of young workers from the wages council system. There is no doubt that high wages for young people choke off training opportunities and reduce employment opportunities for young people, because employers are not willing to employ youngsters on the pay that they are forced to give adult workers. There is no harm in again citing the statistics. In West Germany, apprentices earn between 15 and 25 per cent. of the adult rate. In the United Kingdom, they earn between 50 and 60 per cent. of the adult rate. In wages council trades, the basic rate paid to 16-year-olds is 65 per cent. of the adult rate, and for 17-year-olds it is 75 per cent. Most wages councils require the full adult rate to be paid at 18 or 19. When my hon. Friend the Member for Cornwall, North said that young workers were paid 50 or 60 per cent., he was asked, "Fifty or 60 per cent. of what?". That is largely irrelevant.

Ms. Clare Short: Not if one is trying to pay the rent.

Mr. Maclean: It is not irrelevant to the young people who cannot get jobs. We have heard much talk from the Opposition about defending the low-paid, but they must decide about whom they are really concerned—the 25 million people who have a job, or the 3·5 million people who are not in work?

Mr. Robert C. Brown: Both.

Mr. Maclean: If the Opposition were genuinely concerned about both, the hon. Gentleman would not attempt to support a measure which would freeze out a minimum of 8,000 workers and possibly 250,000 workers, and prevent them from getting a job.
There is no doubt that reducing relative wage levels for young people to a rate that reflects their inexperience and the value of their contribution can have a startling effect. The EETPU—the hon. Member for Ladywood said that Conservative Members could not quote any other examples—

Ms. Clare Short: It is true.

Mr. Maclean: I cannot quote any other examples because all the other trade unions have exercised such a tight grip over their workers and over management that they have not allowed an agreement similar to the

electricians' agreement to be negotiated. If more trade union leaders had the guts of those in the electricians' trade union, there would be a darned sight more agreements such as that negotiated by the EETPU.
The May 1985 study by the Department of Employment on the effect of wage minima in the clothing industry suggested that up to 50,000 jobs had been lost between 1954 and 1979 because of wages councils. If there was a possibility of a factory closing this week, resulting in the loss of 50,000 jobs, would there not be applications under Standing Order No. 10, and would not the right hon. Member for Manchester, Gorton (Mr. Kaufman) be dropping in with more points of order to raise after he had primed his press men to wait in the Press Gallery? If 50,000 jobs are lost through the actions of trade unions, we hear not a cheep from the Opposition.
In July 1985, in an article in Economic Affairs, Dr. Stanley Siebert estimated that an extra 250,000 jobs for young people would follow the removal of the effects of wages councils. The most pessimistic study mentioned by the Opposition suggests that a minimum number of jobs —only 8,000 extra—might be created if wages councils were abolished. I like that humbug! If it were a question of the Government dismissing 8,000 employees, or of 8,000 jobs being lost, would we hear these sob stories from the Opposition? When there is a possibility of 8,000 new jobs as a minimum, with a possibility of 250,000 new jobs, being created, there is not a cheep from the Opposition.
What do the young people want? We have heard constituency examples of what might happen to young people in employment, but we have heard nothing about the young unemployed. In July 1985, a Gallup poll showed that eight out of 10 of the young people interviewed said that they would prefer low pay to start with rather than have no job at all.
I can understand why the Labour party does not understand the principle of pricing young people into a job. It is anathema to them. They never had to consider the matter while the trade unions ruled the country. I can understand why Labour does not understand it. The employers had no say in those jobs in the trade unions which came about through patronage and nepotism. They had no say in the jobs in the mines, in the shipyards in SOGAT, in the NGA and in all those jobs which were handed down from father to son. They had no say in the jobs for the boys in the trade union movement, about which Labour Members are so pleased. They do not understand the concept of pricing into a job, and they do not particularly like it.
Many of us have priced ourselves into a job. I trained as a lawyer, but I did not try to step into a highly paid job in middle management. I priced myself into a job and started at £40 a week in 1975, and that was not a particularly high wage then.
What the Opposition do not like about this concept is. that it brings in a spirit of independence. They would like every person to have to depend on employment, to be employed by someone else. They want to stop at national trade rates which are dictated by the unions. Labour Members dislike the philosophy of the Bill.
I must say to the hon. Member for Jarrow (Mr. Dixon) that I shall not take a lesson in wages morality from him. Conservative Members are accused of paying more for a lunch than a young worker is paid during a week, or during a day. I find that rather insulting as someone who is the


son of a tenant farmer, brought up in the highlands of Scotland in the 1950s. I do not think there were many expense account lunches going for them or for Conservative Members.
The hon. Gentleman is still living in the days of class warfare. He likes to believe that Members on the Labour Benches represent working-class lads and are working for the low-paid and for the unemployed. It sticks in the craw of Labour Members when they see a Conservative Member—such as my hon. Friend the Member for Sherwood (Mr. Stewart)—representing a mining area. They cannot understand it. A situation in which individuals can take a low-paid job to begin with, and through their own efforts and hard work rise to the top and command much higher salaries, or break out of the employee-employer mentality and go into business for themselves, is anathema to Labour Members. They dislike it intensely, and that is at the core of their resistance to this measure, because it gives independence to young people to go out and seek a job at a lower rate than the minima which Labour Members would like to insist that everyone should have.
My hon. Friend who is to wind up the debate was in Penrith recently to present awards and a cheque at one of our super new hotels in the area. Penrith business men say to me, "Look, we appreciate what you have done so far and the fact that you are trying to reduce the burdens on industry. You have abolished Labour's iniquitous national insurance surcharge. You are changing the national insurance rules. You are trying to help us, but please make it easier to get young people into employment. We want to employ young people and take on young workers, but there is no way that we will pay them grossly inflated wages for the first few years when they cannot sell that equivalent amount in goods." A man in a shoe shop said to me, "I would happily take on a worker tomorrow, provided that I could pay him a lower rate than the standard norm which the wages council imposes, because in the first year he will not be able to sell £50 worth of shoes."
There is one other statistic that I want to give from Penrith. It has been said tonight that low pay brings with it areas of high unemployment. One of the growth areas in my constituency is taking businesses which have given up in other parts of the country, particularly Liverpool, where the attitude to industrial relations is not conducive to success. Penrith has 11·2 per cent. unemployment, and I do not think that Labour Members would say that we are a high wage area. We are a relatively low wage area in Cumbria, yet we still have only 11·2 per cent. unemployment, and the reason has nothing to do with wages councils. It is to do with the fact that we are the 12th highest constituency in the United Kingdom for small businesses and private enterprise, for people breaking out on their own and setting up businesses.
There is one superb example which I see every couple of weeks. Last Easter, a young man knocked on my door. He said that he was leaving school during the summer months and wanted to set up a window cleaning business. He was going around collecting potential customers, and he has now set up in business for himself. He has not sat back and listened to the whines from the Opposition that we cannot create more jobs; that young people are accepting wages that are below a magic norm which they

would like to see paid. That young man has priced himself into work. The Bill will allow thousands of others to price themselves into work, and it ought to be accepted and passed.

Mr. Dave Nellist: Because of the shortness of time I shall not deal with part I or part III of the Bill. I want to concentrate instead on the position of young workers under part II.
About five days ago I described this Cabinet as being like a headless chicken running around in its death throes. After Westland and the "Brittangate" scandal, and Austin Rover and so on, that was perhaps an acceptable description.
But there is nothing aimless about tonight's Bill. It is a squalid measure deliberately aimed at half a million young workers in this country. Where are the Tory protesters, who one would have believed in recent weeks were bursting out all over the Tory party? Where are these "One-Nation" people from the weekend protesting about standards of low pay in this country? There has not been one genuine speech from the Tory Benches today defending the position of young unemployed or young low-paid workers. The fact is, of course, that we have not one nation but two. While young workers earn £30, £40 and £50 a week, the Government have a Cabinet Secretary on £1,500 a week. We have a Government who preside over an economy in which 26 companies have directors earning over £150,000 a year. Top of the tree is Richard Giordano, managing director of British Oxygen, who gets £15,000 a week for selling fresh air. Even that is dwarfed by the hon. Member for Brighton, Hove (Mr. Sainsbury) and the other two members of his family who run that little grocery store— Sainsbury's—and who between them own £808 million-worth of shares and take home £150,000 a week.
It would take somebody covered by one of these wages councils over a century to earn what these three individuals get in a week, yet we are told that it is one nation. Incidentally, the other member of the family is the treasurer of the SDP; they do not get out of it scot-free.
We are told that there is a split in the Tory party over the future for Britain. There is a little disagreement between the right hon. Member for Henley (Mr. Heseltine) and the right hon. Member for Chingford (Mr. Tebbit). It is like the difference between the iron fist and the velvet glove. When the Government come with this Bill to mug young workers and nick their wage packets, those young workers will not be too worried whether or not the hand that nicked the money is wearing a glove, unless the Government intend to cover up the fingerprints and conceal who is taking the money away from them.
The instrument of renunciation which announced that the Bill was going to be introduced was published in July. Tory Members said how wonderful the youth of this country were who had just raised £50 million the previous weekend in the Live Aid concert, yet three days later, on the Wednesday, they castigated precisely the same young people for pricing themselves, their friends and their neighbours, out of work. Twenty-four hours later, the Government said that, in order to have an incentive to get the right people in the job, they needed wage rises of 30, 40 or 50 per cent. for 2,000 generals, top civil servants, judges and so on.


When Ministers are told that it is rubbish that low pay and high employment go hand in hand, they are reluctant to give straight answers. During the past few years, the number of wages councils has fallen from 61 to 26. What has happened to pay and employment in sectors where wages councils have disappeared? If that were examined, one would find dramatic falls in both employment and wages. "Why look in a crystal ball when one can read the book" on the effects of the abolition of these councils?
Since 1979 when the Prime Minister walked into 10 Downing street, school leavers' wages have fallen, relative to adult wages, by 12 per cent. for boys and 13 per cent. for girls. During the same period, youth unemployment has trebled. Youth wages have been driven down, but jobs have not been created. Yet the Government say that young people must be priced into jobs, and that if only they would accept low wages, employers would recruit them rather than skilled adults. The Department of Employment's statistics show that eight out of 10 jobs, which were supposedly created by the young workers scheme and other forms of subsidy and wage cutting, are job substitution. Older workers are being driven out of jobs. The Government are merely shifting unemployment up and down the age spectrum and around the country. No real new jobs are being created.
The wages councils have existed for 75 years. About 500,000 workers will be affected by the fact that wages councils are no longer to apply to those aged under 21. The rates of pay range from £32 for 16-year-olds to £78 for 21-year-olds. I have received dozens of letters from young workers, mainly young women, since I introduced a national minimum wage Bill which called, in today's money, for £120 for a 35-hour week as a national minimum wage, below which no 18-year-old should be allowed to fall.
A lass in Hounslow in Middlesex who is a dental assistant wrote:
My boss says says he can't afford to give me a rise, which I think is stupid—he has a Rolls Royce. Last year I said to him I was looking for another job. He said 'OK! Find another job then. There's 3,000 people on the dole in this area. I can easily get another little junior.—
That shows how wages have been driven down, and how employers, encouraged by the Government, use mass unemployment to cow workers and their trade union organisations into accepting poor working conditions.
A 19-year-old office worker in Wolverhampton wrote:
When I was doing my training, I was on £30 a week. Now I'm kept on permanently, I get £32·50 a week. As I am 19, I do not think that this is a good wage. I will not ask for a pay rise as they will only give me the sack.
The fear of unemployment is used to keep young workers on poverty wages.
A 17-year-old office worker in York tells me that she is nearly 18 and is receiving take-home pay of £41 a week. She attends night classes twice a week on her own accord, and works hard because she realises that that is the only way to get on. At 18 she should be entitled to a good rise, but she was disgusted to find out that £65·70 a week was the amount to which she was legally entitled. She doubts if she could even get an increase to that level. All she wants to be content is to go home after a good day's work, having earned a decent wage for that day's work. If the measure is passed, there will be no contentment for 500,000 workers.
During the past six years the Government have cut the YTS allowance by £14 a week. If it had increased

according to earnings or inflation it would be £40 a week, but it is £27. That follows the prediction of Sir John Hoskyns who was a member of the Cabinet's Think Tank and adviser to the Prime Minister. He drafted the original YTS, and said that its aim was to increase the differential between youth and adult wages. Add to that the Government's new legislation, such as preventing claims against unfair dismissal until a person has worked for two years for the same employer, and one sees that the measure seeks to produce a conveyor belt of school leavers. They will get on it aged 16 at £27·30. After two years YTS they will enter a job for which there is either no minimum legal requirement for a wage or for which the general level of wages has been driven down to between £30 and £40. Before two years is up, when they could claim unfair dismissal and receive the full adult rate at 21, they can be chucked out on their ear. Then there are supplementary benefit cuts to ensure that they have no incentive to go on the dole to escape poverty wages.
Tory Members often argue that the gap between wages and benefits is not big enough. First they cut the benefits, and now they seek to cut wages. Next, they will cut more benefits. The Government are always trying to drive down those levels so that they can hand out more tax cuts to the top 5 per cent. Despite their arguments, unemployment climbs relentlessly. Despite getting rid of earnings-related benefit and other meagre protections to the unemployed, they cannot explain why in the 1960s, when the gap was smaller between the wages of those in work and the benefits of those who had lost a job, unemployment was less than a tenth of its present level.
Several Tory Members, especially the hon. Member for Penrith and The Border (Mr. Maclean), mentioned the Henry Neuberger story about 8,000 jobs being created within five years if wages councils were substantially reformed. What do 8,000 jobs in five years mean? They mean 2·2 jobs per year per constituency. More than 7,000 people are unemployed in my constituency. Are the Government saying that I must tell about 2,500 young workers in my constituency that they must accept wage cuts, so that we can create 2·2 new jobs a year in the constituency? If the position were not so serious, that would be ridiculous and laughable.
People are unemployed because there are no jobs, and because £50,000 million has left the country during the past five years for South Africa, Brazil, Korea, Argentina and other countries where wage rates are deliberately kept low at the barrel of a gun, and where unions are illegal. That is what the Government want in this country. They want Bangledesh wages in Britain, British workers to be the coolies of western Europe, and trade unions to have the same restrictions that the Government admire in Brazil, South Africa and Poland.
We want real jobs. Last summer 5,000 youngsters let school in Coventry. One in eight of them got a job, totalling 675. One hundred and eighty-nine youngsters left special schools for the mentally and physically handicapped. Two years ago, only two found a job, but this year we had a big increase of three, as five found a real job. What good is it to mentally and physically handicapped kids, who usually end up in unskilled or partly skilled jobs, to see cuts in their wage rates? Will that get their friends jobs? Absolutely not.
One firm, GEC, had 1,000 redundancies in Coventry before Christmas. Lord Weinstock is involved. Was that because of high wages or a lack of money? GEC has


£1,400 million liquid cash in the bank, so it cannot tell me that it cannot invest in Coventry and provide jobs. In the west midlands, 50,000 young workers will lose protection because of the Bill. For the remaining workers, paid holidays, weekend and shift premiums, overtime, and skill differentials will go. Between 6,000 and 8,000 young workers will lose all protection in Coventry.
I am not speaking merely to defend wages councils, although I shall vote to defend them. They are inadequate because the Tory Government have tried to make them inadequate. They have cut £2·5 million from the budget, and one third of the inspectors. In the west midlands the average inspection rate of a factory is once every 16 years. In the west midlands, 300 employers were found to be underpaying workers last year but not one of them was prosecuted. The Government have cut the mileage allowance for the inspectors and some inspectors run out of petrol in August. They spend September, October, November and December locked in the office because they cannot get their cars on the road to investigate factories.
In the face of all that, the Government call themselves a Government of law and order. Last year, 11,000 miners were found guilty of breaking the law. Some 600 were sacked and 200 were put in prison. Over the same period, 9,500 employers were found guilty of breaking the law but only two were prosecuted and were fined £107 each. Since 1981, 18 employers have been prosecuted out of the 30,000 or 40,000 who have been found guilty. So according to the Tories the working classes must abide by the law but the Government's friends in industry change the law to avoid having to observe it.
The level of unemployment in this country has nothing to do with wages. It has everything to do with the inability of the capitalist system to provide jobs for working people. I asked why the lowest unemployment was not in India and the highest not in Sweden, if high wages caused high unemployment. Why has unemployment dramatically increased over the past six or seven years? The answer is simple. It is due to the refusal of those who own and control wealth to invest in manufacturing industry in this country.
I have quoted a figure of £50,000 million but I have a better statistic than that. The leading banks estimate that the current gap between investment in British manufacturing industry and that of Europe, Japan and America has opened up to £200,000 million. That is 35 to 40 times the sum invested each year in the factories. Unemployment has nothing to do with wages in hotels, shops, and the clothing and catering trades. It is due to lack of investment. That is why British industry has lost its world markets. It controlled a third of the world markets in the 1950s, but now its share is down to 6 per cent. Not only has it lost the world markets; it has lost domestic markets as well. We should look at the level of our imports of fridges, motor bikes, cars, electronics and those in all the other sectors of the economy. We used to call this country the workshop of the world; now it is the warehouse of the world because of the lack of investment in manufacturing industry.
The problem is not caused merely by a lack of money. In the three years from 1981 to 1984, the top 51 companies in this country had a 77 per cent. rise in profits. Several of those companies have Tory Members on their boards of directors. Those companies saw their profits rise at twice

the speed of their turnover. In other words, they increased exploitation of their workers and pushed down their workers' wages.
There are two nations in this country and the Bill is designed to exacerbate that position. A million people earn more than £20,000 a year and 8,000 of them are millionaires. That latter figure has doubled under the Tory Government, yet there are 9 million people living on poverty wages. In the face of that, how can we talk about creating jobs when some Tory Members are earning £350 a week, and there are some who have not just one job, but three or even five jobs? In fact, the right hon. and learned Member for Hexham (Mr. Rippon) has 32 jobs apart from being a Member of Parliament. In 29 of those he is the chairman of the company concerned. How many people is the right hon. and learned Gentleman putting out of work? How can Tory hon. Members understand what it is like to live on £40 or £50 a week?
The Government are doing nothing for youth unemployment. Last year, 517,000 youngsters left school to chase 12,355 vacancies. The chances of a school leaver getting a job in England is 39 to one. In Wales the chance is 129 to one and in Scotland 144 to one. There were 51 careers offices without one vacancy. A further 36 careers offices had only one job each on offer. How will cutting the wages of kids on £35, £40 or £45 a week increase the jobs on offer in careers offices? To get those jobs, the first thing that we must do is get rid of those on the Treasury Bench and ensure the return of a Labour Government prepared to take the economy into public ownership, plan the economy and give the workers rights and a say in how that economy is run.
I began by describing the Bill as squalid. I end in a similar vein. It is because youth unemployment has trebled under the Government that we need greater protection for those youngsters in work. Since 1979, under this Prime Minister, 500,000 school leavers have never had a day's work. The protection of their friends who have jobs and the wages which they presently enjoy—if I may use that word—ought to be a matter of urgency for the House.
If the Bill is passed and the wages council protection for young workers disappears, there is only one route left for those young people. The trade unions—the General, Municipal, Boilermakers and Allied Trades Union, the Union of Shop, Distributive and Allied Workers Union, the Transport and General Workers Union, and the National Union of Public Employees—must ensure in the next six months a massive recruitment campaign among young workers so that we can have a strong labour and trade union movement constructed around youth.
Those young workers who may read the report of this debate should not despair, despite seven years of the Tory Government. Those workers should be involved in constructive vandalism. They should tear apart the Tory capitalist economy brick by brick and replace it with an economy in which the workers who create the wealth have a say in how that wealth is distributed and where ownership is vested in working people. Then the low pay in which this Tory Government revel and want to make worse can be put into the dustbin of history for ever.

Several Hon. Members: rose—

Mr. Speaker: I understand that the Front Bench speakers wish to rise at 9.20 pm. Three hon. Members wish to take part in the debate. If they were to take five minutes each, I should be able to call them all.

Mr. Martin M. Brandon-Bravo: I wish to comment on three aspects of the Bill—wages councils, small firms and payments other than in cash.
Before coming to the House, I was employed as a manager in the clothing industry. Our problem was the shortage of skilled workers and the cost of training. The company was always in advance of anything that the wages council recommended, particularly at the skilled end of the wage scale. It therefore puzzles me why the hon. Member for Jarrow (Mr. Dixon) should challenge the clause defining an adult skilled worker as someone of the age of 21. I cannot see the logic of arguing that that will mean young people entering the industry and pushing out adults when, in the same breath, the hon. Gentleman said that when they finished their first few years of work and reached the age of 21, they would be dismissed. That is illogical.
When we had questions on this subject some months ago, I asked my right hon. Friend the Secretary of State for Employment whether he would allow industries to choose a mechanism that would establish a definition for an adult skilled worker in that industry instead of the Government choosing the age of 21.
A number of hon. Gentlemen have referred to the problem faced by young people entering an industry. Let us take as an example someone aged 19. He may have been away from school for three years. He may have been in retailing, done unskilled work or been out of work. That person may suddenly have the opportunity of moving into an industry that requires skills. Under present legislation, there is no way in which a manufacturing company which primarily requires skilled workers can take on that 19-year-old. Under the existing regulations, the company would have to pay that young man the full skilled wage because, according to the book, he would have been in employment for three years. He would have to be paid the full adult rate. It would therefore turn him away. I know that to be the case.
The hon. Member for Birmingham, Ladywood (Ms. Short) is always keen to defend the rights of women workers. The problem that I have described applies to the textile industry. It is even worse when a woman is involved. A woman may have married young, had a family and want to return to work. Because she is over 21, she cannot go into the textile manufacturing industry, because present constraints require that she be paid the full adult rate although she can contribute nothing.
I accept that research has resulted in the age of 21 being chosen. I should have preferred the textile industry to be able to say that someone was an adult worker when he or she could show three years' employment within the industry. That would have answered the problem.
I believe that the description "small firm" still causes confusion. The technical description of a small firm is one that employs fewer than 200 people. The Bill addresses itself to deregulation—if I may use that phrase—for firms employing fewer than 10 people.
In the bus legislation we use the terms "large bus" and "little bus". I wish that we could incorporate into legislation the term "little firm", so that we would know that we were discussing firms employing fewer than 10

rather than the term "small firm", which is the usual off-the-cuff description of firms employing fewer than 200 workers.
Those hon. Members who have never sought to run a business, however small, cannot imagine the hassle and disincentive of a rule book a mile long to someone who seeks to create employment. Anything that we can do to remove regulations and paperwork from the little firm must help employment.
I endorse the logical and clear arguments of my hon. Friend the Member for Penrith and The Border (Mr. Maclean) in favour of trying to do away as much as possible with the transfer of cash. For many years it was always a source of great worry to me, as the factory manager, to send our senior clerk with an assistant to the bank to collect the wages for more than 200 staff. We tried all the mechanisms, such as going at different times or making the trip on different days. That brought about the problem of storing large sums of money overnight in a safe, which in turn brought insurance problems. We happily changed to security vans, which make runs at the same time and on the same day, but the House is well aware of the tragedies that have happened to security vans.
If we can move towards the techniques of other sophisticated countries, where staff are paid by cheque or credit transfer, we shall have moved sensibly in the right direction and made at least a step towards abolishing one form of crime—the weekly attacks on people who collect wages in cash.

Mr. Robert C. Brown: It is often said in the House that the best speeches are the ones that are never made. I am afraid that that is applicable to me this evening.
In the few moments available to me I wish to put some facts on the record. I am most interested in the part of the Bill that relates to wages councils. I could not get as excited as the hon. Member for Penrith and The Border (Mr. Maclean) about the Truck Acts, and I have no intention of getting involved in that aspect.
The wages councils cover almost 3 million workers. The main industries covered by the councils, which have not been fully discussed, are hotel and catering, retailing, and textiles and clothing. Of the workers covered by the wages councils, four fifths are women, about 2 million people; two thirds are part-time workers, about 2 million; one fifth are young workers, about 500,000; and one tenth are home workers—of whom many are disabled—and they represent about 330,000 people. The Bill takes vicious sanctions against those people.
The wages councils set minimum wage rates and other terms and conditions of employment such as holidays, but the proposals in the Bill will remove all under-21s from wages councils regulations, restrict wages councils to setting a single rate of pay, introduce new powers for the Secretary of State to modify or abolish individual councils and to deratify ILO convention 26 on low pay.
The main effects of the proposals will be that young workers' wages will be forced down to the YTS level of less than £30 a week. Adult workers will be replaced by cheap workers aged under 21, and that will hit women workers especially hard. Many workers will lose their legal right to annual holidays. It is worth repeating that Britain is the only EC country that does not provide legal holiday entitlement for all workers.


It is a scandal that, of the 21 democracies that form the Council of Europe, Britain stands out like a sore thumb. There was a time when hon. Members like myself who are members of the Council of Europe could travel to Strasbourg with heads held high and with pride in our country, but now the finger is pointed at us. It is galling to hear Members of Parliament from countries such as Turkey talking about the British Government treading on human rights. I no longer go to Strasbourg with great pride, because at every Council session members quote the decision on Cheltenham, the repression of trade unions and convention 3632. The next time we go to Strasbourg, they will be accusing us over ILO convention 26.

Mr. Michael Hancock: I am grateful to the hon. Member for Newcastle upon Tyne, North (Mr. Brown) for allowing me five minutes to speak in the debate. I was amazed by the way in which the Paymaster General bounced into the Chamber this afternoon and spoke with so much enthusiasm for the legislation, yet found it so difficult to drum up support among Conservative Members. For long periods, few Conservative Members were present, and there was a lack of support for his enthusiasm.
Other hon. Members have listed the problems that will beset youngsters. Yesterday, we had a debate about young people in training, and hon. Members on both sides of the House expressed anxiety about getting youngsters into work. The Bill will not get people into work; I am surprised that so few Conservative Members realise the problems of 17 and 18-year-olds in their constituencies, many of whom are married and some of whom have children. They have the same problems and the same struggle to exist as do people twice or three times their age. Yet the Government display cynical contempt for their position, and say that we can price them into jobs. I have never heard anything so stupid as the suggestion that we can price many youngsters into jobs. No one got to grips with the problem of providing jobs for them to fill. Do those hon. Members who have spoken seriously suggest that hairdresser shops will suddenly recruit more staff? Of course not. They will simply pass out of the door those who have reached the age of 21.
I am amazed that hon. Members have not considered more carefully the problems of the restaurant trade in their areas. It is not good enough for hon. Members to comment on the problems that they have in getting people into work without seriously considering the consequences of what happens elsewhere. I hope that the alliance amendment will attract support from both sides of the House, because even some Conservative Members must realise that it is worthy of support.
There is no doubt that the Truck Acts must be considered. It would be stupid of any hon. Member to suggest that the wages councils present the best way to solve all the problems facing youngsters. That is not true, and we must investigate ways to improve the system.
This legislation will do nothing to improve the lot of young people. It will undoubtedly make it more difficult for them to survive in a job once they have it, and the cynical disregard shown by Conservative Members is a clear example of the contempt in which they hold young people. They do not give a damn about the young

unemployed and by their actions they are convincing me, and I hope the young unemployed, that they have little or no regard for the people who are lucky enough to have a job. Few of those people who are now aged 18 will still be in a job when they are 21 should the Bill be passed.
When the Paymaster General sucks on his Fisherman's Friend to warm him, as he did after he finished his speech, he should consider that the heat that he gets from that will be as nothing compared with the heat of our young people when they see what this Bill will do for their prospects for the future.

Ms. Clare Short: The Bill, as many Labour speakers have said, is a nasty, mean-minded measure, which will attack the living standards of some of the poorest workers. It is unacceptable to the Labour party, and it is notable that far more Members spoke from the Opposition Benches, while the Tory Whips have gone around scraping up people who have clearly come in and prepared speeches a few minutes before they delivered them.
It is not good enough for the Postmaster General—[Interruption.] Perhaps he is the postmaster for the Secretary of State, the Prime Minister's friend, who sits in the other place. It is not good enough for the Paymaster General simply to pretend that the Bill is tidying up some outdated legislation. It is a dishonest argument and not worthy of the serious issues that we are discussing. Equally, it is unworthy of the hon. Member for Penrith and The Border (Mr. Maclean) to claim to be concerned about the young unemployed. If he were, he should look at the evidence, which would make him realise that the Government's attack on the living standards of the low-paid young workers will do nothing to increase employment for young people.
Wages council workers are among the lowest paid of the low paid. We are talking about real poverty, about people who run out of money at the end of the week and who have to decide whether to buy bread or put money in the gas meter. That is not a joke, and hon. Members should not pretend that the situation can not be compared with Victorian times, when there was "real" poverty and pretend that there is not real poverty now. There is, and it is growing. In our constituencies, we meet people who suffer terrible problems, and I am shocked that Conservative Members are not sensitive to those who are suffering.
We are talking about people who are living on wages that are less than Conservative Members, and perhaps even Labour Members, would spend on one dinner. I am told that the Paymaster General is a gourmet, so he probably spends more. We are talking about cutting wages that, for adults, range from £50·25 to £76·50; and that is gross. Off that money has to be taken tax and national insurance. So people take home pay that is between £7 and £9 less than that.
Those who will be most hurt by the Bill are the young people. Some 500,000 young workers will immediately cease to have protection for their wages and see direct wage cuts. That is the Government's intention, and they want to introduce such a move. Even so, there is an attack on the wage protection for adults. The hon. Member for Banbury (Mr. Baldry) kept attempting to intervene during Labour Members' speeches to suggest that there was to be no such attack, but that is not true.


One rate with no differentials for skills means that it is likely that wages will level down to that one rate. There is no special weekend working rate which means that workers, especially shop workers—the Shops Bill will come to this House shortly—will be expected to work longer hours for less pay. In retailing, this measure will lead to a loss of jobs and fewer people employed.
The meanest proposal is the lack of protection that will be given to some of the poorest workers to ensure that they have a holiday each year. We will be the only country in Europe which will cease to provide this for their workers. There will be no protection for shift workers either. The hon. Member for Banbury has tried to suggest that it is not true that there are poor people working in the wage councils sector, but I am shocked that he attempts to advance such an argument. The majority of the people who work in the wage councils sector—the lowest paid workers in Britain—are women. In one in four households the main breadwinner is a woman either because she is on her own or her partner is unemployed or low-paid. Almost half—45 per cent.—of low-paid women, working full time, are single parents or living alone.

Mr. Baldry: rose—

Ms. Short: I shall give way when I have finished my attack on the hon. Gentleman.
The hon. Member for Banbury went on to suggest that it was somehow outrageous that in the wages councils sectors the young workers had a higher percentage of the full adult rate than they did in other sectors. He simply does not understand. A wage of £40 is the minimum on which to survive—to be able to get out, get the food, get the bus and get to work—and the minimum to make it worth working. If one is working in the low-paid sector where the adult rate is £80 or so, £40, or something approaching that, is a higher percentage of £80 than it is of the average wage across the economy—which is £168.

Mr. Baldry: I am obliged to the hon. Lady for giving way. The point I made and on which I think there is no argument, is that the main cause of poverty is not low pay but no pay. I was not seeking to suggest that there were not people working in the wages councils sector who were in poverty. But, overall, poverty is due to no pay rather than low pay.

Ms. Short: We agree that unemployment is far too high and causes poverty. We know that under this Government unemployment has soared and that the incidence of low pay has increased. The number of people earning poverty pay has increased massively under this Government. The two have gone together—an increase in poverty because of unemployment and an increase in poverty because of low pay. It is not one or the other.
The Government's proposals are based on pure dogma and blind prejudice, and the Paymaster General knows that. There may be some Tory Back Benchers who believe in Tory dogma and propaganda and have not examined the evidence, but I do not believe that the Ministers at the Department of Employment are not aware that their case is unproven. The Government have scratched around and commissioned research project after research project to try to prove that their dogmatic views are true. They have

failed. There is no respectable academic evidence to support their views. The Government are aware of that and should be ashamed of trying to suggest otherwise.
Britain has a low wage economy. The hourly wage level in Britain is below that of every other European country. Unit labour costs in real terms, measured in a common currency, fell by 10 per cent. between 1979 and 1984. If we compare Britain with the United States—which we understand is the great model which we should emulate and to which we should sell half our industries —unit labour costs rose by 24 per cent. in the same period.
Let us take the example of Japan—Conservative Members should try to understand the lesson that is available from Japan. Between 1967 and 1977, United Kingdom hourly earnings rose by 13·5 per cent. while those in Japan rose by 15·9 per cent. The hourly rates in Japan rose to a greater extent. However, unit labour costs in Japan rose by only 8·1 per cent. as compared with 11·5 per cent. in the United Kingdom. It is significant that, during the period 1974–1977, Japan's gross capital investment per head of population was more than twice that of the United Kingdom. That is the remedy.
What is wrong with the British economy is our low investment over a long time. The answer does not lie with low wages and sweat shops, which create such unstable conditions that employers cannot invest because they are under-bidding each other for cheap labour. The result of that is Britain competing with the poorest countries in the world, and never getting out of our difficulties.
We are told that wages are too high in the wages councils sector and that, if they would only drop, there would be more jobs. From 1974 to 1984, pay has fallen steadily as a percentage of national earnings in that sector—from 73 per cent. to 65 per cent. It has been suggested that pay in the wages councils sector has increased. That is quite wrong. What is more, there has been no increase in the number of jobs. What the Government are telling us has been tested, and it does not work.
The Government claim that it is necessary to create jobs for young workers and therefore to cut their wages. We were told in the disgraceful press release put out by the Department of Employment, which was not sent to us, and which the Paymaster General read today:
The central purpose of the Bill is to create new job opportunities, particularly for young people.
Since 1979, payment to young workers has fallen relative to adult workers. Young males are now paid 30 per cent. less in comparison with average earnings and women are paid 24 per cent. less than the average, yet unemployment has doubled.
The Government's thesis has been tested. Young people's wages have fallen dramatically, but unemployment has continued to increase dramatically. What are these massive wages of young workers that must be cut? Men under 18 get 34·9 per cent. of the adult rate of pay. How can anybody suggest that that is not significantly cheaper than an adult? Men aged 18 to 20 get 55·7 per cent. of the adult rate. In terms of money, first year apprentices in hairdressing get £31·75 gross. They have to pay tax and national insurance out of that. Other young hairdressers receive £37·70. These are the earnings which Conservative Members want to cut. In retailing, the rate for 16-year-olds is about £47. The Paymaster General told us that he wanted such a level of pay reduced. He should


be ashamed of himself. I am sure that he spends more on one dinner. In retailing, 17-year-olds get between £52 and £55—as much as £20 less than an adult doing the same job.
We have more evidence from a Government experiment—the young workers' scheme. The Government have already tested the thesis. They subsidised young people's wages, and at enormous expense. They paid £15 a week to an employer who would pay £45 or less a week to a young worker, and £7·50 if he paid £50 or less. What did they find? The Institute for Manpower Studies in Sussex found that 94 per cent. of the subsidised jobs would have existed anyway. That was a massive subsidy to cut youth wages to generate all of the jobs that we were told would cry out to be filled if only wages were lower, but they did not materialise. Employers grabbed the subsidy for jobs that would have existed anyway. The Government's own figure is 77 per cent.
And what of the 10 per cent. of new jobs that were created? No less than 40 per cent. were adult jobs. Young people replaced adults. What the Government are doing in the Bill was tested in that scheme, and it failed. That is why the Government have got rid of the scheme. In so far as the Bill will succeed, it will enable young people to be employed at the expense of adults. Those adults will be mostly women, probably the young people's mothers. When they are 21, the young people will be chucked out of work so that their younger brothers, sisters and cousins can be taken into low-paid work.
The Government pretend that some of this simplification—and I think that we would agree on a need for a review of the wages council orders but not an undermining of protection for the low paid—is necessary because so many of the firms in this sector are small. That simply is not true. It is worrying for us to face a Government who keep pouring out claims for their legislation but when we examine the evidence, we find repeatedly that the claims are false. It is not a matter of interpretation; they are falsified.
For example, as I said to the hon. Member for Colne Valley (Mr. Wainwright) in an intervention, Income Data Services did a survey of wage council workers in retailing, hotels and the licensed trade—that is, 2 million workers out of 2·75 million workers. In its words and not mine, these sectors are dominated by large, if not giant, firms. It cannot be argued that such massive employers do not understand wages council orders and are incapable of applying them. The Department of Employment's own surveys of employers and small businesses found no expression of concern in any quantity about the problems of employment legislation in respect to wage councils.
The ILO convention has been mentioned by a number of my hon. Friends, and 94 countries have signed it. It is the most popular convention. Many Third world countries have signed it and have agreed to give some minimum protection to workers and young workers. One country finds it necessary to get out of that convention, and that is Britain. Britain cannot afford to protect its young in the way that Third world countries can. We should be deeply ashamed. We hear Conservatives talk about the need to cut wages and to create jobs. How is it that all these other countries can manage to comply with that convention but we cannot?
What else do we know? We know what the Government have done since they came to power. They have weakened the existing protection given by the wages councils. The number of inspectors has been cut by one third. The number of employers who have been breaking the law has grown. Those figures have been quoted in a number of speeches. What do we expect? The law has been weakened and now they will enforce it even less and it will be broken even more. Even those weedy conditions which are included in the Bill will not apply to all workers, and the kind of protection which they are entitled to expect in Britain in 1986 will not be forthcoming.
The Truck Acts have been mentioned by a number of my hon. Friends. The Government say that they want to encourage cashless pay. We are not against cashless pay, but we think, as do the banks, that it should not be forced upon people. In our view, employees are entitled to negotiate. For some workers, there are difficulties: if one earns a small amount of money it may not be worth having a bank account, and some other arrangements will have to be made. For example, if one lives in a rural area and cannot easily get to a bank, that will need to be accommodated. It should be a matter of free choice and negotiation. It is not necessary to take away from workers the right to object. Employers should be required to negotiate with workers if they want to move to cashless pay. As I said earlier, the banks did not even ask for this. There is a long-term trend away from cash pay and towards people having bank accounts. We would expect that trend to continue, but let people do it freely as they wish and not have it forced upon them by a Government who take away the protections they previously enjoyed.
The Government make a false claim when they state that in future all workers will be better protected because deductions of more than 10 per cent. cannot be made. The only remedy that workers have is to go to a tribunal. The only penalty for employers is that they will be forced to pay back 10 per cent. All employers will surely say: if in doubt, deduct. Employers will be deducting 10 per cent. in retailing, in garages and so on in the absence of a penalty. In addition, there has been no increase in the penalty for employers who break wages council orders, yet as new criminal justice legislation is enacted, fines are being increased. The Government do not mean to enforce the legislation or to punish employers who are breaking the law.
What does it all amount to? As I said at the beginning, it is a mean-minded measure based on dogma, not evidence. It is an attempt to cut the wages of the poorest workers in Britain. It will not create jobs; it will simply create more poverty. It is wrong on the basis of justice for working people; it is also wrong on the basis of economic efficiency. It is nonsense if Britain goes down the road of seeking to compete with the poorest countries.
The good employer who wants to train his work force and who wants to invest will be undercut by the bad. That is what Winston Churchill said in 1909 and what the CBI said in part of its evidence in the Government's consultation. There is a real danger that the bad employer will undercut the good. That is the road that we are going down.
We will have sweatshop conditions. In my region of the west midlands we used to have full employment and decent wage levels. We now have some of the lowest wage levels in the country. In my constituency we have Victorian textile sweatshops employing people at illegal


rates of pay in dangerous conditions. In other parts of the country where the clothing industry has more capital investment, more training and more sophistication, it is being undercut and is being forced to close down. That is bad for employees in Birmingham and the west midlands, and it is a bad road for the Government to go down.
Let us hear nothing more from the Prime Minister in interviews with the CBI magazine about her great concern for the low-paid and her anxiety to ensure that they should have tax cuts. We know that the Government have no concern for the low-paid; otherwise they would withdraw the Bill. We shall fight it thoroughly in Committee.

The Parliamentary Under-Secretary of State for Employment (Mr. David Trippier): We have had an interesting and useful debate. Much has been said with a strength of feeling that I recognise. We are being pulled in opposite directions by two different tides. Some hon. Members, such as the hon. Member for Newham, North-East (Mr. Leighton), suggest that we should keep wages councils in exactly their present form, while others, such as my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) suggest that we have not gone far enough. Between those positions, we are proposing a sensible and moderate reform.
Having listened carefully to the hon. Members for Kingston upon Hull, East (Mr. Prescott) and for Birmingham, Ladywood (Ms. Short), I believe that they brought the wrong speeches to the debate. They talked continually as if we intended to scrap the wages councils system. That is not the case. Certainly we intend to reduce rigidities and red tape in the labour market to promote jobs. Certainly we intend to bring the law on the payment of wages into the 20th century. Certainly we intend to help young people to take that vital first step on the employment ladder against competition from older and more experienced workers.
At the same time, we want to maintain a basic level of protection for workers in wages council industries where the work of the councils has become an accepted part of the fabric of the industry. We also want to provide new protection against deductions from pay where there is known abuse to ensure that workers are paid what is rightly due to them and that a large proportion of their pay packets does not disappear in deductions. I repeat that we are retaining wages councils.
Useful points have been made in the debate. My right hon. and learned Friend the Paymaster General and I will consider them seriously. That is a genuine commitment. It is expected that Governments of all political persuasions do not listen to the appeals made to them when they put forward Green Papers or consultative documents. In this case we issued consultative documents on parts I and II of the Bill. We have settled on proposals that won majority support in the consultation exercise. So the hon. Member for Manchester, Blackley (Mr. Eastham) is wrong. We could have gone down the route of scrapping wages councils but we decided not to do that because we thought that we should opt for the moderate way. We recognise that many employers were making representations to us at that time saying that they thought they were useful in the particular fabric of that industry.

Mr. Eastham: The Minister has said to the House that the Government intend to retain the wages councils. That

is meaningless, because Member after Member has said that thousands of firms are breaking the law. Is the Minister saying that the Government propose to ensure that those companies will abide by the orders of the wages councils? They are obviously not doing so at present.

Mr. Trippier: We are actually talking about people who are breaking the law —only 8 per cent. of those who were visited. We are concentrating on the worst offenders. I think that the hon. Gentleman will have to accept that we intend to keep up the pressure on that. The point that the hon. Gentleman and his colleagues must accept is that we are determined to keep the wages councils in their present form but without the control across a wide front for those aged under 21.
We have listened to those who have made representations to us in the consultation procedure. One would have thought that that would receive some welcome from the Opposition, but it did not. The views of some hon. Members, as expressed today, seem to be as rigidly set in the old mould as some of the ancient and anomalous legislation that the Bill seeks to repeal. It is vital to see the Bill in the context of the Government's wider policy of deregulation and simplification. We are intent on removing burdens and red tape from employers. We want to let the ordinary business man, principally the small business man, get on with the job that he is good at—creating wealth and work. The one thing which has been missing from the debate is any recognition by the Opposition of the people who set up those businesses and create the jobs.

Mr. Foulkes: rose—

Mr. Trippier: It is as if the jobs were conjured out of thin air. [Interruption.]

Mr. Speaker: Order. One at a time.

Mr. Foulkes: rose—

Mr. Trippier: If the hon. Member will take his seat, he will enjoy this. I am going to attack the alliance.
The alliance amendment is absolutely fascinating. It seems that the alliance parties have completely abandoned the small business man's lobby. They do not seem to recognise that they are the people who create the jobs. Yet, in the past, the alliance has been quick enough to fly on our coat tails when we have been pursuing the policy of deregulation and simplification. I have had question after question on that matter in the past. Can this be a U-turn by the alliance? Is it going to abandon the small business man altogether?

Mr. Wainwright: Did the Minister not hear me say that the CBI, through its small firms division and then its council, has shown no enthusiasm for the major parts of the Bill, for the good reason that no self-respecting new or small business man wants to be labelled a third-rake employer?

Mr. Trippier: I have a great deal of regard for the CBI's small firms council but representations by the CBI generally, I should think, would not represent the small firms lobby in general. I was fascinated when, far from suggesting that we should deregulate, the hon. Gentleman suggested that we should have different rates of pay in all travel-to-work areas. By my estimation that makes 334—

Mr. Foulkes: rose—

Mr. Trippier: With great respect, the hon. Gentleman has not been in the Chamber for the majority of the debate.

Mr. Robert C. Brown: rose—

Mr. Trippier: That would make 334 different rates of pay. If the Bill gives the average small employer in a wages council industry a little more time to spend on running his business, developing it and strengthening it, rather than having to grapple with the complexity of wages council orders, it will be a worthwhile measure on that score alone. In the wider context, the Bill has a significant contribution to make to changes in the way that we regard methods of creating wealth and jobs, developing—

Mr. Foulkes: rose—

Mr. Speaker: Order. The Minister is not giving way.

Mr. Foulkes: On a point of order, Mr. Speaker. I ask you to help my right hon. and hon. Friends, Mr. Speaker. We had great difficulty earlier on. Is it the case that the Minister said that only 8 per cent. of employers break the law—

Mr. Speaker: Order. I think that the hon. Gentleman heard that perfectly well.

Mr. Trippier: The hon. Gentleman should not have risen in his place. I am trying desperately to answer some of the questions that have been asked by his hon. Friends during the debate. He is wasting the time of the whole House. If my responsibilities—

Mr. Caborn: rose—

Mr. Trippier: I hope that the hon. Gentleman will be fair. He has had a fair crack of the whip. He had the opportunity to make his speech and he intervened in the speeches of others. He did not allow others to intervene while he was speaking. I have allowed many interventions in my reply. I think that the hon. Gentleman had better resume his seat.
Given my responsibilities within the Department I have considered the Bill in the light of the question, what will it do for the small employer and his work force? The short answer is that it will do a great deal. Part I makes it possible to sort out a system of wage payments that suits everyone. The employer will not find that he can offer a far better package of terms of employment to non-manual workers, perhaps including fringe benefits such as a car, than he can offer to manual workers, for fear that manual workers will complain about a breach of the Truck Acts. That is something on which no one seems to have touched during the debate. The employer will be able to sort out a set of controls on deductions from pay that is agreed between him and his employees and which ensures that everyone knows where he stands, with a quick and simple system of appeal to an industrial tribunal.
Part II will make wages council orders much simpler to understand. It will limit them to the basic elements in pay and will ensure that wages councils consider the employment implications of the decisions that they take, which is only common sense.
Part II will open up the possibility for employers to take on extra young people at a rate of pay that properly reflects the value that they can add to the business. That is the point that my hon. Friend the Member for Penrith and The Border (Mr. Maclean) was making—I think that he was

doing so effectively—and that is what will concern the potential employer. He will address himself to the value that a young person will be able to add to the business.

Mr. Nellist: rose—

Mr. Trippier: If the young person will be unable to cover his own wage, the employer will not accept him or her. We must recognise that young and inexperienced workers will not be able to add the same value to the business as older workers. That is the argument that my hon. Friend the Member for Banbury (Mr. Baldry) rightly advanced. Faced with that choice, the employer will not normally take on young workers if more experienced workers are on offer.
If we have an order of priorities, we must concentrate on young workers, and the Bill will assist in that process. There may be some substitution, but we believe that there will be a net increase in employment as a result of our proposals.
Part III introduces a sensible reform in that it frees public spending on job creation instead of subsidising redundancy. The position of small employers is safeguarded and—

Mr. Nellist: Will the Minister give way on part II?

Mr. Trippier: No.
However, the position of the small employer is safeguarded. Much has been said, particularly by the hon. Member for Coventry, South-East (Mr. Nellist) about young workers. The Bill will give youngsters a chance. Furthermore, relatively few young workers have the same family responsibilities as adults, and for those who do there is financial support in the family income supplement.

Mr. Nellist: rose—

Mr. Speaker: Order. The hon. Member has made his speech. The Minister is not giving way.

Mr. Trippier: The philosophy of the legislation is to return such questions as holiday entitlement, which is a contractual matter, to agreement between employer and employee. And so they should be.

Mr. Nellist: rose—

Mr. Trippier: All the existing contractual rights of workers will continue. I say again that we are not scrapping the wages councils.

Mr. Nellist: On a point of order, Mr. Speaker.

Mr. Trippier: Much has been made in the debate—[Interruption.]

Mr. Speaker: Order. I will take the point of order.

Mr. Nellist: You have had occasion, Mr. Speaker—perhaps more than once during the two and a half years that I have been a Member of Parliament—to remind me of the traditions and customs of this House. The Minister referred specifically to me. Is it not, in your opinion, the custom for him to give way when I ask him to do so?

Mr. Speaker: I understand that the Minister is referring to speeches that have been made during the debate. He is necessarily referring to hon. Members who have spoken in the debate.

Mr. Trippier: The hon. Gentleman has a nerve, Mr. Speaker. I cut my wind-up speech from half an hour to 20


minutes to allow hon. Members such as him to get in, because every time the hon. Gentleman opens his mouth he helps our side.
Much has been made in the debate of the different conclusions that have been drawn relating to the impact —[Interruption.]

Mr. Speaker: Order. We are getting towards the end of the debate. Let us keep it in order.

Mr. Trippier: As I have already said, much has been made of the different conclusions that have been drawn relating to the impact upon wages council rates. The studies reach different conclusions. That has been referred to by both sides of the House.

Mr. Nellist: rose—

Mr. Trippier: Different conclusions are also drawn about the scale of the effects. However, in one respect they point in the same direction. In general, the different studies provide evidence that regulating wages and pushing them up can harm job prospects, especially for the young. A common-sense conclusion seems to be drawn and it is generally understood to be the basic law of economics: to raise the price means to cut the demand. When the abolition of the wages councils was being debated, the studies produced a wide variety of estimates.

Mr. Nellist: rose—

Hon. Members: Sit down.

Mr. Trippier: All showed some gain in the number of jobs. Even the study "From the Dole Queue to the Sweatshop", published by the Low Pay Unit—this was referred to by the hon. Member for Sheffield, Central (Mr. Caborn)— and written by Henry Neuberger who styles himself the economic researcher to the Leader of the Opposition, estimated that 8,000 jobs would be created. Earlier today the hon. Member for Kingston upon Hull, East (Mr. Prescott) pressed my right hon. and learned Friend the Paymaster General for a figure. We have now given that figure. [Interruption.] It is given in this study and it shows a net increase. We are happy that there is general acceptance of the fact that there is a net increase in the number of jobs.

Mr. Nellist: Will the hon. Gentleman give way on that point?

Mr. Trippier: No.
The most amazing hypocrisy that we have heard from Opposition Members would lead one to believe that the Opposition, when in government, had never scrappd a wages council, yet during the last two periods when the Opposition were in office they presided over the scrapping—

Mr. Prescott: Will the hon. Gentleman give way?

Mr. Trippier: No, not on this point.
More than 500,000 people came out of the wages council system. That was referred to by the hon. Friends of the hon. Member for Kingston upon Hull, East, not by him.

Mr. Prescott: Yes, it was.

Mr. Trippier: The same sympathy should have been expressed for those who came out of the wages council system then as have come out of it subsequently, and who may have come out of it very recently.
Small firms have had a poor deal out of the redundancy rebate scheme. They have been paying in contributions for the past 20 years but have been getting little back. There have been massive redundancies in the nationalised industries, including steel, gas and rail, and in large organisations, such as GEC and ICI. This is good legislation for jobs, especially for young people seeking work. It is good for business men, especially small business men. I commend the Bill to the House.

Question put, That the amendment be made:

The House divided: Ayes 25, Noes 265.

Division No. 67]
[10 pm


AYES


Ashdown, Paddy
Owen, Rt Hon Dr David


Beith, A. J.
Penhaligon, David


Bruce, Malcolm
Ross, Stephen (Isle of Wight)


Campbell-Savours, Dale
Steel, Rt Hon David


Carlile, Alexander (Montg'y)
Stewart, Rt Hon D. (W Isles)


Field, Frank (Birkenhead)
Thomas, Dafydd (Merioneth)


Freud, Clement
Wainwright, R.


Hancock, Michael
Wigley, Dafydd


Howells, Geraint
Wilson, Gordon


Hughes, Simon (Southwark)
Wrigglesworth, Ian


Johnston, Sir Russell



Kennedy, Charles
Tellers for the Ayes:


Kirkwood, Archy
Mr. David Alton and


Livsey, Richard
Mr. James Wallace.


Meadowcroft, Michael





NOES


Adley, Robert
Carlisle, Kenneth (Lincoln)


Aitken, Jonathan
Carlisle, Rt Hon M. (W'ton S)


Alexander, Richard
Channon, Rt Hon Paul


Amess, David
Chapman, Sydney


Ancram, Michael
Chope, Christopher


Arnold, Tom
Clark, Dr Michael (Rochford)


Ashby, David
Clark, Sir W. (Croydon S)


Aspinwall, Jack
Clarke, Rt Hon K. (Rushcliffe)


Atkins, Rt Hon Sir H.
Clegg, Sir Walter


Atkins, Robert (South Ribble)
Cockeram, Eric


Atkinson, David (B'm'th E)
Coombs, Simon


Baker, Rt Hon K. (Mole Vall'y)
Cope, John


Baker, Nicholas (Dorset N)
Couchman, James


Baldry, Tony
Cranborne, Viscount


Banks, Robert (Harrogate)
Critchley, Julian


Batiste, Spencer
Crouch, David


Bellingham, Henry
Currie, Mrs Edwina


Bendall, Vivian
Dickens, Geoffrey


Benyon, William
Dorrell, Stephen


Best, Keith
Douglas-Hamilton, Lord J.


Biffen, Rt Hon John
Dover, Den


Biggs-Davison, Sir John
du Cann, Rt Hon Sir Edward


Blackburn, John
Durant, Tony


Body, Sir Richard
Dykes, Hugh


Bonsor, Sir Nicholas
Eggar, Tim


Boscawen, Hon Robert
Emery, Sir Peter


Bottomley, Peter
Evennett, David


Bottomley, Mrs Virginia
Fairbairn, Nicholas


Bowden, Gerald (Dulwich)
Fallon, Michael


Braine, Rt Hon Sir Bernard
Farr, Sir John


Brandon-Bravo, Martin
Favell, Anthony


Bright, Graham
Fletcher, Alexander


Brinton, Tim
Forman, Nigel


Brittan, Rt Hon Leon
Forsyth, Michael (Stirling)


Brooke, Hon Peter
Fowler, Rt Hon Norman


Brown, M. (Brigg &amp; Cl'thpes)
Fox, Marcus


Bruinvels, Peter
Fraser, Peter (Angus East)


Bryan, Sir Paul
Freeson, Rt Hon Reginald


Buchanan-Smith, Rt Hon A.
Fry, Peter


Buck, Sir Antony
Galley, Roy


Budgen, Nick
Gardner, Sir Edward (Fylde)


Bulmer, Esmond
Garel-Jones, Tristan


Burt, Alistair
Gilmour, Rt Hon Sir Ian


Butcher, John
Glyn, Dr Alan


Butterfill, John
Goodlad, Alastair


Carlisle, John (Luton N)
Gower, Sir Raymond






Grant, Sir Anthony
Pawsey, James


Greenway, Harry
Percival, Rt Hon Sir Ian


Gregory, Conal
Pollock, Alexander


Grist, Ian
Porter, Barry


Ground, Patrick
Portillo, Michael


Grylls, Michael
Powell, William (Corby)


Hampson, Dr Keith
Powley, John


Hanley, Jeremy
Prentice, Rt Hon Reg


Harvey, Robert
Price, Sir David


Heddle, John
Raffan, Keith


Henderson, Barry
Raison, Rt Hon Timothy


Heseltine, Rt Hon Michael
Rathbone, Tim


Higgins, Rt Hon Terence L.
Rees, Rt Hon Peter (Dover)


Hogg, Hon Douglas (Gr'th'm)
Rhodes James, Robert


Holland, Sir Philip (Gedling)
Rhys Williams, Sir Brandon


Holt, Richard
Ridley, Rt Hon Nicholas


Howell, Ralph (Norfolk, N)
Ridsdale, Sir Julian


Hubbard-Miles, Peter
Roberts, Wyn (Conwy)


Hunt, David (Wirral W)
Roe, Mrs Marion


Irving, Charles
Rossi, Sir Hugh


Key, Robert
Rost, Peter


Knight, Greg (Derby N)
Rowe, Andrew


Lamont, Norman
Rumbold, Mrs Angela


Lang, Ian
Ryder, Richard


Lawler, Geoffrey
Sackville, Hon Thomas


Lawrence, Ivan
Sainsbury, Hon Timothy


Lawson, Rt Hon Nigel
St. John-Stevas, Rt Hon N.


Lennox-Boyd, Hon Mark
Sayeed, Jonathan


Lewis, Sir Kenneth (Stamf'd)
Shaw, Giles (Pudsey)


Lightbown, David
Shaw, Sir Michael (Scarb')


Lilley, Peter
Shepherd, Colin (Hereford)


Lloyd, Ian (Havant)
Shepherd, Richard (Aldridge)


Lloyd, Peter (Fareham)
Silvester, Fred


Lord, Michael
Sims, Roger


Lyell, Nicholas
Smith, Tim (Beaconsfield)


McCrindle, Robert
Soames, Hon Nicholas


McCurley, Mrs Anna
Speed, Keith


Macfarlane, Neil
Spence, John


MacGregor, Rt Hon John
Spencer, Derek


MacKay, John (Argyll &amp; Bute)
Spicer, Jim (Dorset W)


Maclean, David John
Spicer, Michael (S Worcs)


McNair-Wilson, M. (N'bury)
Squire, Robin


McNair-Wilson, P. (New F'st)
Stanbrook, Ivor


Major, John
Stanley, Rt Hon John


Malins, Humfrey
Stern, Michael


Malone, Gerald
Stevens, Lewis (Nuneaton)


Maples, John
Stewart, Allan (Eastwood)


Marlow, Antony
Stewart, Andrew (Sherwood)


Marshall, Michael (Arundel)
Stewart, Ian (Hertf'dshire N)


Mates, Michael
Stokes, John


Maxwell-Hyslop, Robin
Stradling Thomas, Sir John


Mayhew, Sir Patrick
Sumberg, David


Mellor, David
Tapsell, Sir Peter


Merchant, Piers
Taylor, Teddy (S'end E)


Meyer, Sir Anthony
Tebbit, Rt Hon Norman


Miller, Hal (B'grove)
Temple-Morris, Peter


Mills, Iain (Meriden)
Thomas, Rt Hon Peter


Mitchell, David (Hants NW)
Thompson, Donald (Calder V)


Moate, Roger
Thompson, Patrick (N'ich N)


Monro, Sir Hector
Thorne, Neil (Ilford S)


Montgomery, Sir Fergus
Thornton, Malcolm


Moore, Rt Hon John
Townend, John (Bridlington)


Mudd, David
Tracey, Richard


Murphy, Christopher
Trippier, David


Neale, Gerrard
Trotter, Neville


Needham, Richard
Twinn, Dr Ian


Nelson, Anthony
van Straubenzee, Sir W.


Neubert, Michael
Vaughan, Sir Gerard


Newton, Tony
Viggers, Peter


Nicholls, Patrick
Waddington, David


Norris, Steven
Wakeham, Rt Hon John


Oppenheim, Rt Hon Mrs S.
Waldegrave, Hon William


Ottaway, Richard
Walden, George


Page, Sir John (Harrow W)
Walker, Bill (T'side N)


Page, Richard (Herts SW)
Waller, Gary


Parkinson, Rt Hon Cecil
Ward, John


Parris, Matthew
Wardle, C. (Bexhill)


Patten, Christopher (Bath)
Watson, John


Patten, J. (Oxf W &amp; Abgdn)
Watts, John


Pattie, Geoffrey
Wells, Sir John (Maidstone)





Wheeler, John
Woodcock, Michael


Whitfield, John
Yeo, Tim


Whitney, Raymond
Young, Sir George (Acton)


Wiggin, Jerry
Younger, Rt Hon George


Wilkinson, John



Winterton, Mrs Ann
Tellers for the Noes:


Winterton, Nicholas

Mr. Archie Hamilton and


Wolfson, Mark
Mr. Francis Maude.


Wood, Timothy

Question accordingly negatived.

Main Question put forthwith pursuant to Standing Order No. 41 (Amendment on Second or Third Reading):—

The House divided: Ayes 263, Noes 206.

Division No. 68]
[10.15 pm


AYES


Adley, Robert
Critchley, Julian


Aitken, Jonathan
Crouch, David


Alexander, Richard
Currie, Mrs Edwina


Amess, David
Dickens, Geoffrey


Ancram, Michael
Dorrell, Stephen


Arnold, Tom
Douglas-Hamilton, Lord J.


Ashby, David
Dover, Den


Aspinwall, Jack
du Cann, Rt Hon Sir Edward


Atkins, Rt Hon Sir H.
Dykes, Hugh


Atkins, Robert (South Ribble)
Eggar, Tim


Atkinson, David (B'm'th E)
Emery, Sir Peter


Baker, Rt Hon K. (Mole Vall'y)
Evennett, David


Baker, Nicholas (Dorset N)
Fairbairn, Nicholas


Baldry, Tony
Fallon, Michael


Banks, Robert (Harrogate)
Farr, Sir John


Batiste, Spencer
Favell, Anthony


Bellingham, Henry
Fletcher, Alexander


Bendall, Vivian
Forman, Nigel


Benyon, William
Forsyth, Michael (Stirling)


Best, Keith
Fowler, Rt Hon Norman


Biffen, Rt Hon John
Fox, Marcus


Biggs-Davison, Sir John
Fraser, Peter (Angus East)


Blackburn, John
Fry, Peter


Body, Sir Richard
Galley, Roy


Bonsor, Sir Nicholas
Gardner, Sir Edward (Fylde)


Boscawen, Hon Robert
Garel-Jones, Tristan


Bottomley, Peter
Gilmour, Rt Hon Sir Ian


Bottomley, Mrs Virginia
Glyn, Dr Alan


Bowden, Gerald (Dulwich)
Goodlad, Alastair


Braine, Rt Hon Sir Bernard
Gower, Sir Raymond


Brandon-Bravo, Martin
Grant, Sir Anthony


Bright, Graham
Greenway, Harry


Brinton, Tim
Gregory, Conal


Brittan, Rt Hon Leon
Grist, Ian


Brooke, Hon Peter
Ground, Patrick


Brown, M. (Brigg &amp; Cl'thpes)
Grylls, Michael


Bruinvels, Peter
Hamilton, Hon A. (Epsom)


Bryan, Sir Paul
Hampson, Dr Keith


Buchanan-Smith, Rt Hon A.
Hanley, Jeremy


Buck, Sir Antony
Harvey, Robert


Budgen, Nick
Heddle, John


Bulmer, Esmond
Henderson, Barry


Burt, Alistair
Heseltine, Rt Hon Michael


Butcher, John
Higgins, Rt Hon Terence L.


Butterfill, John
Hogg, Hon Douglas (Gr'th'm)


Carlisle, John (Luton N)
Holland, Sir Philip (Gedling)


Carlisle, Kenneth (Lincoln)
Holt, Richard


Carlisle, Rt Hon M. (W'ton S)
Howell, Ralph (Norfolk, N)


Channon, Rt Hon Paul
Hubbard-Miles, Peter


Chapman, Sydney
Hunt, David (Wirral W)


Chope, Christopher
Irving, Charles


Clark, Dr Michael (Rochford)
Key, Robert


Clark, Sir W. (Croydon S)
Knight, Greg (Derby N)


Clarke, Rt Hon K. (Rushcliffe)
Lamont, Norman


Clegg, Sir Walter
Lang, Ian


Cockeram, Eric
Lawler, Geoffrey


Coombs, Simon
Lawrence, Ivan


Cope, John
Lawson, Rt Hon Nigel


Couchman, James
Lennox-Boyd, Hon Mark


Cranborne, Viscount
Lewis, Sir Kenneth (Stamf'd)






Lightbown, David
Ryder, Richard


Lilley, Peter
Sackville, Hon Thomas


Lloyd, Ian (Havant)
Sainsbury, Hon Timothy


Lloyd, Peter (Fareham)
St. John-Stevas, Rt Hon N.


Lord, Michael
Sayeed, Jonathan


Lyell, Nicholas
Shaw, Giles (Pudsey)


McCrindle, Robert
Shaw, Sir Michael (Scarb')


McCurley, Mrs Anna
Shelton, William (Streatham)


Macfarlane, Neil
Shepherd, Richard (Aldridge)


MacGregor, Rt Hon John
Silvester, Fred


MacKay, John (Argyll &amp; Bute)
Sims, Roger


Maclean, David John
Smith, Tim (Beaconsfield)


McNair-Wilson, M. (N'bury)
Soames, Hon Nicholas


McNair-Wilson, P. (New F'st)
Speed, Keith


Major, John
Spence, John


Malins, Humfrey
Spencer, Derek


Malone, Gerald
Spicer, Jim (Dorset W)


Maples, John
Spicer, Michael (S Worcs)


Marlow, Antony
Squire, Robin


Marshall, Michael (Arundel)
Stanbrook, Ivor


Mates, Michael
Stanley, Rt Hon John


Maxwell-Hyslop, Robin
Stern, Michael


Mayhew, Sir Patrick
Stevens, Lewis (Nuneaton)


Mellor, David
Stewart, Allan (Eastwood)


Merchant, Piers
Stewart, Andrew (Sherwood)


Meyer, Sir Anthony
Stewart, Ian (Hertf'dshire N)


Miller, Hal (B'grove)
Stokes, John


Mills, Iain (Meriden)
Stradling Thomas, Sir John


Mitchell, David (Hants NW)
Sumberg, David


Moate, Roger
Taylor, Teddy (S'end E)


Monro, Sir Hector
Tebbit, Rt Hon Norman


Montgomery, Sir Fergus
Temple-Morris, Peter


Moore, Rt Hon John
Thomas, Rt Hon Peter


Mudd, David
Thompson, Donald (Calder V)


Murphy, Christopher
Thompson, Patrick (N'ich N)


Neale, Gerrard
Thorne, Neil (Ilford S)


Needham, Richard
Thornton, Malcolm


Nelson, Anthony
Townend, John (Bridlington)


Neubert, Michael
Tracey, Richard


Newton, Tony
Trippier, David


Nicholls, Patrick
Trotter, Neville


Norris, Steven
Twinn, Dr Ian


Oppenheim, Rt Hon Mrs S.
van Straubenzee, Sir W.


Ottaway, Richard
Vaughan, Sir Gerard


Page, Sir John (Harrow W)
Viggers, Peter


Page, Richard (Herts SW)
Waddington, David


Parkinson, Rt Hon Cecil
Wakeham, Rt Hon John


Parris, Matthew
Waldegrave, Hon William


Patten, Christopher (Bath)
Walden, George


Patten, J. (Oxf W &amp; Abgdn)
Walker, Bill (T'side N)


Pattie, Geoffrey
Waller, Gary


Pawsey, James
Ward, John


Percival, Rt Hon Sir Ian
Wardle, C. (Bexhill)


Pollock, Alexander
Watson, John


Porter, Barry
Watts, John


Portillo, Michael
Wells, Sir John (Maidstone)


Powell, William (Corby)
Wheeler, John


Powley, John
Whitfield, John


Prentice, Rt Hon Reg
Whitney, Raymond


Price, Sir David
Wiggin, Jerry


Raffan, Keith
Wilkinson, John


Raison, Rt Hon Timothy
Winterton, Mrs Ann


Rathbone, Tim
Winterton, Nicholas


Rees, Rt Hon Peter (Dover)
Wolfson, Mark


Rhodes James, Robert
Wood, Timothy


Rhys Williams, Sir Brandon
Woodcock, Michael


Ridley, Rt Hon Nicholas
Yeo, Tim


Ridsdale, Sir Julian
Young, Sir George (Acton)


Roberts, Wyn (Conwy)
Younger, Rt Hon George


Roe, Mrs Marion



Rossi, Sir Hugh
Tellers for the Ayes:


Rost, Peter
Mr. Tony Durant and


Rowe, Andrew
Mr. Francis Maude.


Rumbold, Mrs Angela





NOES


Adams, Allen (Paisley N)
Ashley, Rt Hon Jack


Alton, David
Ashton, Joe


Archer, Rt Hon Peter
Atkinson, N. (Tottenham)


Ashdown, Paddy
Bagier, Gordon A. T.





Banks, Robert (Harrogate)
Hancock, Michael


Barron, Kevin
Hardy, Peter


Beckett, Mrs Margaret
Harrison, Rt Hon Walter


Beith, A. J.
Hattersley, Rt Hon Roy


Bell, Stuart
Haynes, Frank


Benn, Rt Hon Tony
Heffer, Eric S.


Bennett, A. (Dent'n &amp; Red'sh)
Hogg, N. (C'nauld &amp; Kilsyth)


Bermingham, Gerald
Home Robertson, John


Bidwell, Sydney
Howells, Geraint


Blair, Anthony
Hoyle, Douglas


Boothroyd, Miss Betty
Hughes, Dr Mark (Durham)


Boyes, Roland
Hughes, Robert (Aberdeen N)


Bray, Dr Jeremy
Hughes, Roy (Newport East)


Brown, Gordon (D'f'mline E)
Hughes, Sean (Knowsley S)


Brown, Hugh D. (Provan)
Hughes, Simon (Southwark)


Brown, N. (N'c'tle-u-Tyne E)
Janner, Hon Greville


Brown, R. (N'c'tle-u-Tyne N)
John, Brynmor


Brown, Ron (E'burgh, Leith)
Johnston, Sir Russell


Bruce, Malcolm
Jones, Barry (Alyn &amp; Deeside)


Buchan, Norman
Kaufman, Rt Hon Gerald


Caborn, Richard
Kennedy, Charles


Callaghan, Rt Hon J.
Kilroy-Silk, Robert


Callaghan, Jim (Heyw'd &amp; M)
Kinnock, Rt Hon Neil


Campbell, Ian
Kirkwood, Archy


Campbell-Savours, Dale
Lambie, David


Canavan, Dennis
Lamond, James


Carlile, Alexander (Montg'y)
Leadbitter, Ted


Carter-Jones, Lewis
Leighton, Ronald


Clark, Dr David (S Shields)
Lewis, Ron (Carlisle)


Clarke, Thomas
Lewis, Terence (Worsley)


Clay, Robert
Litherland, Robert


Clelland, David Gordon
Livsey, Richard


Clwyd, Mrs Ann
Lloyd, Tony (Stretford)


Cocks, Rt Hon M. (Bristol S)
Lofthouse, Geoffrey


Cohen, Harry
Loyden, Edward


Coleman, Donald
McCartney, Hugh


Conlan, Bernard
McDonald, Dr Oonagh


Cook, Frank (Stockton North)
McGuire, Michael


Cook, Robin F. (Livingston)
McKay, Allen (Penistone)


Corbett, Robin
McKelvey, William


Corbyn, Jeremy
MacKenzie, Rt Hon Gregor


Craigen, J. M.
McNamara, Kevin


Crowther, Stan
McTaggart, Robert


Cunliffe, Lawrence
McWilliam, John


Dalyell, Tam
Madden, Max


Davies, Rt Hon Denzil (L'lli)
Marek, Dr John


Davis, Terry (B'ham, H'ge H'l)
Martin, Michael


Deakins, Eric
Mason, Rt Hon Roy


Dewar, Donald
Maxton, John


Dixon, Donald
Maynard, Miss Joan


Dobson, Frank
Meacher, Michael


Dormand, Jack
Meadowcroft, Michael


Douglas, Dick
Michie, William


Dubs, Alfred
Millan, Rt Hon Bruce


Duffy, A. E. P.
Morris, Rt Hon A. (W'shawe)


Dunwoody, Hon Mrs G.
Morris, Rt Hon J. (Aberavon)


Eadie, Alex
Nellist, David


Eastham, Ken
Oakes, Rt Hon Gordon


Edwards, Bob (W'h'mpt'n SE)
O'Brien, William


Evans, John (St. Helens N)
O'Neill, Martin


Ewing, Harry
Orme, Rt Hon Stanley


Fatchett, Derek
Owen, Rt Hon Dr David


Faulds, Andrew
Park, George


Field, Frank (Birkenhead)
Parry, Robert


Fields, T. (L'pool Broad Gn)
Pavitt, Laurie


Fisher, Mark
Pendry, Tom


Flannery, Martin
Penhaligon, David


Forrester, John
Pike, Peter


Foster, Derek
Prescott, John


Foulkes, George
Radice, Giles


Fraser, J. (Norwood)
Randall, Stuart


Freeson, Rt Hon Reginald
Redmond, Martin


Freud, Clement
Rees, Rt Hon M. (Leeds S)


Garrett, W. E.
Richardson, Ms Jo


George, Bruce
Roberts, Allan (Bootle)


Gilbert, Rt Hon Dr John
Roberts, Ernest (Hackney N)


Gould, Bryan
Robinson, G. (Coventry NW)


Gourley, Harry
Rogers, Allan


Hamilton, James (M'well N)
Ross, Ernest (Dundee W)


Hamilton, W. W. (Fife Central)
Ross, Stephen (Isle of Wight)






Rowlands, Ted
Thorne, Stan (Preston)


Ryman, John
Tinn, James


Sedgemore, Brian
Torney, Tom


Sheerman, Barry
Wainwright, R.


Sheldon, Rt Hon R.
Wallace, James


Shore, Rt Hon Peter
Wardell, Gareth (Gower)


Short, Ms Clare (Ladywood)
Wareing, Robert


Short, Mrs R.(W'hampt'n NE)
Weetch, Ken


Skinner, Dennis
Welsh, Michael


Smith, C.(Isl'ton S &amp; F'bury)
White, James


Snape, Peter
Wigley, Dafydd


Soley, Clive
Williams, Rt Hon A.


Spearing, Nigel
Wilson, Gordon


Steel, Rt Hon David
Winnick, David


Stewart, Rt Hon D. (W Isles)
Woodall, Alec


Stott, Roger
Wrigglesworth, Ian


Strang, Gavin
Young, David (Bolton SE)


Straw, Jack



Thomas, Dafydd (Merioneth)
Tellers for the Noes:


Thomas, Dr R. (Carmarthen)
Mr. Ron Davies and


Thompson, J. (Wansbeck)
Mr. Ray Powell.

Question agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 42 (Committal of Bills).

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, the Atomic Energy Authority Bill [Lords] may be proceeded with, though opposed, until any hour. —[Mr. Archie Hamilton.]

WAGES BILL [MONEY]

Queen's recommendation having been signified—

Resolved
That, for the purposes of any Act resulting from the Wages Bill, it is expedient to authorise the payment out of money provided by Parliament of the following, namely—

(a) any expenses incurred by the Secretary of State in consequence of provisions of that Act relating to wages councils;
(b) any expenses incurred by such councils in accordance with the terms of any authorisation given by the Secretary of State with the consent of the Treasury;
(c) any increase attributable to that Act in the sums payable out of money so provided under any other Act. —[Mr. Archie Hamilton.]

Orders of the Day — Atomic Energy Authority Bill [Lords]

As amended (in the Standing Committee), considered.

Clause 6

SUPERVISORY POWERS OF SECRETARY OF STATE

Mr. Alexander Eadie: I beg to move amedment No. 1, in page 5, line 13, at end insert
'which will ensure funding for safety'.
I shall not go into the detail of the arguments raised in Committee, but the Minister is aware that I undertook to consider closely what he had to say when we discussed the safety aspect, which was one of the most important debates in Committee. We simply sought to write into the Bill statutory provision for safety in the nuclear power industry. I have closely considered the Minister's response. I cannot say that he did not reply in detail, because he listed a long catalogue of what the industry was doing in this respect. However, I believe that his reply was defective on the obvious count that, if all that was done, we would have had a different Bill. It cannot be denied that the decision to re-organise the Atomic Energy Authority on a trading fund basis changes the position. If it did not, why should we have the Bill?
I mention the role of the Central Electricity Generating Board, because my sources inform me that the organisation is refusing to pay its levy on the work carried out. If that is so, the main thrust and import of the Bill is defective, because we are discussing the finances of the new authority. As to the external financing limit of the new authority, if it required, for example, £15 million and was granted only £9 million, that would affect its work. May I ask the Minister whether such an application has been made and whether the approved funding differs from the application?
At column 31 of the report of the Committee's second sitting on 30 January, the Minister said that my attempt to amend the Bill to provide mandatory provision or requirement was difficult to interpret, because one could not exactly interpret what constitutes an adequate programme. My amendment, which will ensure funding for safety, has removed the word "adequate". The Minister now has the opportunity to write into the Bill such statutory provision. While such a debate is raging about safety in the industry, it would be unwise to leave safety permissive. Indeed, it would be unsafe to do so.

The Parliamentary Under-Secretary of State for Energy (Mr. Alastair Goodlad): In Committee, the hon. Member for Midlothian (Mr. Eadie) raised a crucial issue for debate on safety, to which he has returned today, and I welcome the opportunity to discuss at some length what the authority is doing in this area and how the work would be funded once the authority is operating on a trading fund basis.
In Committee, the hon. Gentleman quoted figures from the 1984–85 annual report and accounts. The figure of £20 million which I gave on Second Reading related to planned expenditure for 1986–87 under programme letters in thermal reactor and general safety research. The two are not strictly comparable. The content of the programmes in all these areas will have moved on somewhat in the intervening time, and the priorities within the programmes


will inevitably change as results come forward. Furthermore, as I said in February of last year when announcing the Government's decisions on the review, the Government were determined that the vote funding of the authority should be sufficient to safeguard an independent programme of research into nuclear safety, but that this did not preclude an increase in funding by the generating boards in specific areas.
In recent years, the CEGB has increased its funding of thermal reactor work—for example, in PWRs—by the authority. As a result of discussions following the review, the generating boards agreed additional contributions to thermal reactor and general safety-related research and development by the authority, to replace some Government funding. As I said, we consider that these shifts in funding are sound, and overall our judgment is that they will have no impact on the authority's independence in nuclear safety research.
The latest estimates of programme letter expenditure envisage the following approximate breakdown in the authority's charges to the Department for 1986–87: for PWR safety, more than £6 million; for the AGR, more than £11 million; and for general nuclear safety research, about £4 million. That gives a total of about £22 million. In addition, the element of the fast reactor programme explicitly concerned with safety is expected to have departmental funding of more than £6 million. Of course, safety-related matters are an important feature of many other parts of the fast reactor programme funded by the Department.
Other work, which was covered by the authority in the "general safety" heading of the annual report, included radiological protection research, nuclear instrumentation work, safeguards work, and the cost of the authority's reactor and plant safety services, or ARPS. All that work will continue. Nuclear instrumentation and ARPS will be charged to overheads, which means that the Department will contribute about £1 million to those. The safeguards programme will continue at a cost of nearly £1 million. Radiological protection work will continue to be Government funded to a significant extent, although only a relatively small proportion will come from the Department of Energy. Substantial funding, totalling almost £2 million in 1986–87 will come from other Government Departments who are particularly interested in the content and results of work in this area, namely the Departments of Environment, and Health and Social Security and the Ministry of Agriculture, Fisheries and Food.
As I said in Committee, the direct funding of research does not cover the full extent of the Authority's expenditure on safety. I do not propose, as I know that the hon. Member for Midlothian does not want me to, to repeat the very full description I gave to members of the Committee about the many facets of the authority's work, which have a bearing on nuclear safety. I can assure the House that the Government attach the highest priority to nuclear safety, and recognise the importance of high quality research in this. The move to the trading fund does not change this view, or its effects and substantial funding of safety related work by my Department will continue.
In the light of these assurances and the explanations that I have given, I hope that the hon. Member for Midlothian will now seek to withdraw his amendment.

Mr. Eadie: I can hardly say that I am satisfied with the Minister's explanation, but I am content in that I have placed on the record what I regard as an important aspect of the Bill. No doubt the staff in particular will read what the Minister said with interest, and time will test it. However, I hope that at no stage will we decide that there has been inadequate funding of research. The Government and the Minister will have it on their heads if that happens.
On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Goodlad: I beg to move, That the Bill be now read the Third time.
We have had a number of useful discussions during the debates on the Bill. I pay tribute to the constructive approach taken by Labour Members. They have probed a number of detailed points relating to the financial framework and future of the Atomic Energy Authority, and I have given a number of assurances.
The main purpose of the Bill is to place the Authority on a trading fund basis, with borrowing powers and a revised capital structure. This is a small but important Bill.
I remind hon. Members of the changes that we propose to the financial framework for the authority. First, the authority will have a revised capital structure, including commencing capital debt, reserves and provisions. We have had a debate on alternatives, but I have emphasised that we regard a commencing capital debt as a sound feature of this revised capital structure and see no need for equity. It is expected after consultations with the authority and the Treasury that the debt will be set at about £80 million. Uncertainties inevitably exist when looking to the future, but assuming a broad continuation of the authority's existing business prospects, forward projections suggest that the authority should be left with a modest profit after payment of interest on its debt. A clear financial target has been agreed with the authority. Over the next three years they will aim to run the business to achieve an annual average return of 5 per cent. on current cost capital employed. Reporting profits, before interest, at this level, while still remaining competitive, will be a challenge for the authority in the early years of the fund but not, we believe, an unrealistic one.
Continued reliance by the authority on grant-aid is not a realistic option for the late 1980s and 1990s. We believe that a trading fund basis for its future operations is a sound one, and will give it the scope to develop its business while ensuring that it responds effectively to customer needs. The authority will in future have the ability to carry surpluses or deficits forward from one year to the next. This will give increased flexibility. It will have greater discretion over the use of internally generated funds, and in future profits from repayment work and royalties resulting from the fund's new intellectual property will contribute to internal funds. In the case of royalties deriving from programme letter work, the proceeds will be shared.
Finally, new capital investment can be financed by borrowing—if internal resources are insufficient—rather than being constrained by the annual grant-in-aid. These freedoms will, we consider, lead to a real change in the way in which the authority is able to conduct its business even though it will not be freed of all controls. This would be quite wrong. It remains within the public sector and will


be in receipt of considerable sums of public money either through programme letters or loans from the National Loans Fund. The controls we are proposing therefore are those necessary to ensure the proper control of public expenditure and the authority's continued accountability to Parliament.
I move on to the detailed provisions of the Bill. Clause 1 provides for the assumption by the authority of a commencing capital debt in the form of a notional loan from the National Loans Fund, deemed to be made on 1 April 1986, and repayable with interest out of the authority's trading profits. I have already described how it will fit into the authority's overall capital structure and financial framework. Clause 2 allows for borrowing from the National Loans Fund in sterling, and for borrowing from elsewhere in any currency if the Secretary of State, with Treasury approval, consents. The amount that the authority can borrow will be subject to the overall limits set in clause 3 and to an annual external financing limit.
Clause 4 empowers the Secretary of State to lend to the authority and sets out the procedures governing such loans. Clause 5 permits the Treasury to guarantee borrowing by the authority from non-Government sources, and sets out the arrangements to be followed if any such guarantee is called. Clause 6 provides that the authority carry out capital investment and other developments only within plans approved by the Secretary of State. Clause 7 provides that compensation may be paid by members of the authority for loss of office, for which there is no provision in the 1954 Act, and repeals section 1(8) of the 1954 Act. Clause 8 clarifies the authority's powers to exploit its intellectual property.
The Bill's enactment will change the direction of the authority in the coming years. Moving to a trading fund will, I believe, lead to increased efficiency, greater scope for development of the authority's business and increased responsiveness to the needs of its customers. I have assured the House that, with these changes, there will be no loss of accountability to the House. The authority expects to continue a vigorous and independent underlying research programme and there will be no effect on nuclear safety.
Hon. Members have probed at considerable length and often whether this Bill is a prelude to privatisation. I have given them a clear assurance, and I will repeat it again. The Government have no plans to privatise the authority. Anxiety has been expressed about undue influence by the Central Electricity Generating Board. I have explained that, even after the shifts in funding that I announced last year, its contribution to the Authority, in terms of turnover, will be less than 15 per cent.
I expect the authority, with its excellent scientific and technical track record, to keep its existing wide range of customers in the United Kingdom and abroad, and to add to it as it pursues a more commercial approach. This, and the maintenance of significant Government funding with the authority's reputation for the integrity and quality of its work, will be a significant safeguard against undue influence from any quarter.
Hon. Members have emphasised the impact of the Bill and the revised financial framework on the employees of the authority. As I said on Second Reading, the dedication and skills of the authority's workforce are its most important assets. Their attitude and morale are crucial to

the success of the trading fund. I hope and believe that they will respond to the challenge it sets. I have given an assurance that we do not intend to set cash limits for the authority's salaries and wages bill. Terms and conditions of service for the Authority's non-industrial employees are currently linked to those of the Civil Service. As I have said, it would not be for the Government to suggest any change in those arrangements. That would be a matter for the Authority and the staff trade unions concerned, within the machinery established under the 1954 Act.
I would like to say something about consultation with employees. There are, of course, two joint bodies involved in consultation in the authority — the National Joint Industrial Council, including representatives of industrial employees, and the authority Whitley Council, including representatives of the non-industrial unions. The employees' representatives of both of those bodies were invited formally, by letter on 20 December, to consider proposals for joint consultation under the trading fund, with particular reference to consultation on corporate planning.
In the case of the staff trade union side, that had been proceded by some informal discussions about the consultation procedures to be applied. They were the discussions to which the Lord Gray of Contin was referring when, on 19 December, he said:
The trade unions are involved in discussions at the present time".—[Official Report, House of Lords, 19 December 1985; Vol. 469, c. 904.]
The record does not, however, draw a clear distinction between those discussions and consultations with the industrial trade unions. I would therefore like to clarify this matter. At that date, the industrial trade unions had not been involved in specific discussions about the consultation procedures to be followed under the trading fund. There had been only a brief discussion at the National Joint Industrial Council meeting on 5 December about the trading fund and its implication for the authority's industrial employees.
The formal approach to industrial and non-industrial employees' representatives was made the following day. No formal response has yet been received. I understand from the authority that it would be the normal practice for the bodies involved to consult their constituent unions before responding.
As I emphasised in Committee, I recognise the importance that authority employees attach to being involved in a meaningful way in discussions with the management about the future of the business, and I strongly support them in that.
I believe that putting the authority's operations on a trading fund basis, within the financial framework that I have outlined, provides a sound basis for the future. I commend the Bill to the House.

Mr. Eadie: I have already expressed disappointment at the fact that the Government have not seen fit to amend the Bill in any way. Even the Minister confirmed that our approach to the Bill was constructive and not in any way destructive. After all, the House must remember that we are seeking to change the structure of the authority after 30 years at the behest of the Government. We have read and heard with keen interest what has been stated in relation to privatisation—that it is not the Government's intention to privatise the authority in this or any other


Parliament. That was read with great interest by the staff of the AEA. We as an Opposition invited the Minister to state the Government's position. We regret that the Government did not take the opportunity to deal with the non-nuclear activities of the authority. If our suggestion had been accepted, it would have underlined the role which the authority plays in this sphere and it would have enhanced the status of the AEA rather than diminish it. That was the last opportunity before the new life of the AEA as constituted in the Bill.
Although the Minister in his speech demonstrated that there had been some second thoughts, I think that the Government put up a very weak defence for not writing into the Bill a requirement of consultation with the recognised trade unions. As a Government, they have not begun to realise that such a statutory right would have been a breath of fresh air in industrial relations. What a source of strength this would have been in an industry which has experienced difficulty in achieving public acceptability. The Government have missed a great opportunity in failing to make this a statutory provision in the Bill.
With regard to membership of the new board and its independence free from commercial interests, the Government promised that this would be allowed. They will be watched and tested by their actions. The Government have a scandalous record in appointments of all descriptions, and have probably done great damage in this respect. Most appointments have the tarnish of being sympathetic to government. For some, this is a monstrous libel on their professional qualifications and integrity.
We still do not know who is to be the new chairman of the authority. We should know this before the Bill completes its passage through the House. I have already had wind of a name, and understand that it is to be the chancellor of one of our universities. If that is so, we are at least saved from the embarrassment and burden of another banker of city accountant-cum-financier. The Government have a bad record in such information having to be prized from them.

Before the debate ends, the Opposition want to know the name and the qualifications of the person who will

become chairman of the new Atomic Energy Authority. Parliament has a right to know when it is asked to pass the Bill. I hope that the Minister will respond to that question. On Second Reading and in Committee we raised the issue repeatedly and we were told that the appointment would be announced.

Mr. Goodlad: With the leave of the House. The hon. Member for Midlothian (Mr. Eadie) has rehearsed again some very important points that we have covered during the proceedings on the Bill. He raised the question of the chairmanship of the authority. As I said in Committee, the Secretary of State shares with him an appreciation of the urgency of the matter. I hope that an announcement will be made before too long. The hon. Gentleman will understand, as will the House, that it would not be appropriate for me to comment on any individual who has been or is being considered.
No doubt the hon. Gentleman would wish, as would all hon. Members, to join me in paying tribute to the very distinguished tenure of office of Mr. Arnold Allen, the chairman who has led the authority in the last two years. I also pay tribute to the employees of the authority for having established it as a pre-eminent body in its sphere in the world.
The enactment of the Bill will mark the end of one era for the authority, but it will open up a new one and will provide new disciplines, challenges and opportunities.
The authority's key role as adviser to the Government will remain. Funding will move closer to a customer-contractor relationship, and the nuclear industry will take on a greater share of funding. But substantial Government funding of safety research will continue, as I have said. The authority's capability for underlying research will be maintained by contributions from all customers. Accountability to Parliament will be preserved.
I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read the Third time, and passed, with amendments.

Orders of the Day — Police, Fire and Civil Defence

The Minister of State, Home Office (Mr. Giles Shaw): I beg to move,
That the draft Local Government Act 1985 (Police and Fire and Civil Defence Authorities) Precepts Limitation Order 1986, which was laid before this House on 30th January, be approved.
The draft order, which I shall be inviting the House to approve, comes at the end of a long process of consultation between my right hon. Friend the Home Secretary and the police joint authorities and fire and civil defence joint authorities established by the Local Government Act 1985. It may help hon. Members to understand the very careful consideration which has been given to the question of the resources which the joint authorities will need if I set out the steps under the Rates Act 1984 which have been followed.
My right hon. Friend notified the joint authorities as soon as they were set up last September of the expenditure level that he had determined for them for 1986–87. At the same time, it was explained to the authorities how they could apply to the Home Secretary to increase the level. All six of the police joint authorities and all seven of the fire and civil defence joint authorities applied for a higher expenditure level. Having closely examined the applications, my right hon. Friend concluded that a higher level was necessary for all the authorities, although he did not feel in most cases that the full increase applied for was justified. In the case of the seven fire and civil defence authorities, he invited them to consider the scope for further economies by imposing a 1·5 per cent. efficiency saving on what would otherwise have been their redetermined expenditure levels.
On the basis of the new expenditure levels, and in the light of the rate support grant settlement for 1986–87, my right hon. Friend notified each authority just before Christmas of the maximum precept that he intended to set. Once again, the joint authorities were invited to make representations if they considered a higher maximum necessary. Three of the police joint authorities, Greater Manchester, Merseyside and West Yorkshire, asked for small increases in the maximum precept. We considered their arguments carefully but concluded that increases were not necessary. Since those three authorities were not able to accept the maximum precept which my right hon. Friend proposed or agree another maximum with him, he must set their maximum by this order. That is why their names are accordingly in the schedule on the reverse of the order before the House. For the three police joint authorities which have agreed a maximum precept, my right hon. Friend has set the precept under the Rates Act 1984 by a notice in writing, as he is required to do.
Five of the fire and civil defence authorities, those for London, the West Midlands, Greater Manchester, Merseyside and West Yorkshire, requested additional money; the three latter authorities asked again for the sums specified in their original applications. All except West Yorkshire submitted a further statement in support of these applications and the reasons why a further increase was thought to be necessary. These were discussed at a series of meetings with representatives from each of the authorities. The arguments were carefully examined and my right hon. Friend decided to increase the maximum

precept in each case except for West Yorkshire. It should be noted that part of these increases reflected his acceptance that these four authorities could not achieve 1·5 per cent. efficiency savings in 1986–87. The revised amounts proposed were accepted by the London and West Midlands authorities, but not by the other three. Consequently these — Greater Manchester, Merseyside and West Yorkshire—are listed in the schedule on the reverse of the order.
May I remind the House why we decided to provide in the Local Government Act 1985 for these joint authorities to be subject to controls on their precepts. It was not because we thought that there had been serious overspending in the services. It was, as colleagues who were in Committee on the Local Government Bill will well remember, to prevent future overspending by the establishment of extravagant and expensive bureaucracies. Certainly, in recent times, it was also to ensure that proper levels of support would be forthcoming for expenditure for the police. It follows that, while we have not ignored the possibility of efficiency savings, particularly in the fire service, we have not sought to reduce the levels of service currently provided in each area. On the contrary, during the passage of the 1985 Act I and other Ministers gave firm and explicit assurances on the future level of both the police and fire services in the metropolitan areas.
We made it quite clear that, in exercising our controls over the police joint authorities, our aim would be broadly to maintain the current level of service in these metropolitan areas. We promised that there would be no arbitrary cuts in police expenditure. We stressed that we were not assuming that there would be any more savings from the police service as a result of abolition. We have fulfilled all these undertakings. I am happy to say that the police joint authorities have taken a responsible and constructive attitude to the exercise and that there are no substantial differences between us. As I said, we have not been able to agree a maximum precept with the three authorities covered by the draft order, but the particular points of disagreement are different in each case and involve relatively small sums. In Greater Manchester it is some £800,000 out of a total budget of some £84·5 million, in Merseyside £825,000 out of £60·4 million, and in West Yorkshire £425,000 out of just under £64 million.

Mr. Simon Hughes: The Minister will remember, as he said, that we had exchanges in Committee on the Local Government Bill. He gave certain undertakings about service, but the other undertakings that he gave were about cost. If we take the figures for Merseyside which the Minister is asking the House to agree, the total of the precept level on the ratepayers of Merseyside of the fire, police and civil defence precept, and of that in the subsequent order—the figure suggested for the passenger transport authority —will, if I have calculated correctly, be 77·69p. That is clearly higher than this year's cost as levied through the county authority. Will the Minister therefore accept that he has to come before the House admitting that the cost to the ratepayer of abolition and change of structure will be higher, as the Opposition parties suggested it would be, and not at the level predicted by himself and his colleagues when we debated it a year ago?

Mr. Shaw: The hon. Gentleman is seeking to find an example to support his argument, and he has found that of


the passenger transport authority. He will be aware that that is the subject of the debate that is to follow this one and that it does not relate to the precept in this order. He will be aware also that the overall savings to be attributed to the Local Government Act amount to £100 million. My right hon. Friend the Secretary of State for the Environment made it clear that no breakdown was submitted to the Committee which considered that measure to enable the judgment to be made by which the hon. Gentleman would seek to trap me.
I shall proceed. We have fulfilled all the undertakings that I gave and I am happy to say that the police joint authorities have taken a constructive and responsible attitude to the changes. The differences between us and those who have expressed disagreement are small. I can assure the House that the sums involved will allow all the police joint authorities fully to discharge their statutory duty to maintain an adequate and efficient force for their areas.
I can offer the further vital assurance, which I am sure the House will expect, that the maximum precepts that we are setting will allow the authorities to operate at a higher level of manpower and not merely to maintain the level of police service in their areas. The three forces concerned are currently holding vacancies for police officers. There are 164 in Greater Manchester, 53 in Merseyside and 105 in West Yorkshire. In setting the maximum precepts for these joint authorities we have specifically satisfied ourselves that, if they choose to do so, the authorities will be able to recruit up to their police officer establishments. The same is true also, incidentally, of the other three police joint authorities not covered by the order.
Both the Merseyside and West Yorkshire police joint authorities have had meetings with my right hon. Friend the Home Secretary and myself to discuss their anxieties about police expenditure in their areas. As a result of these representations and of others, my right hon. Friend announced this afternoon his intention to increase the rate of police grant to police authorities in 1986–87 from 50 to 51 per cent. He is doing this in recognition of the increasing demands on the police service in England and Wales as a whole, especially the need to counter drug abuse — including the setting up of drug wings in regional crime squads — public disorder costs and terrorism. The change will be of particular benefit to the police joint authorities. Under the new arrangements, Merseyside will receive an additional £2·3 million in police grant and block grant. West Yorkshire will receive £2·1 million, and Greater Manchester £3·3 million. These levels clearly exceed the differences between the precept claimed by the authorities and the maximum precepts that are set out in the order. The other police joint authorities will also benefit.

Mr. Allan Roberts: The Minister is famous for saying during a sitting of the Committee which considered the abolition Bill, on which we both served, that no savings would be made in respect of the police, fire and civil defence services. He is trying to justify his claim that there would be no cuts in public expenditure or savings. If we accept that, where will the savings come from on the abolition of the metropolitan authorities, including Merseyside?

Mr. Shaw: The hon. Gentleman's recollection is not entirely correct. I gave an assurance that the uniformed

strength of the police service and the minimum stipulated levels of fire cover would not be the subject of savings. I said that savings in administration should be obtained from the changes which were to be brought about under the joint boards. Under the settlements that are before the House, my right hon. Friend the Home Secretary has asked for a 1·5 per cent. efficiency saving to be made by the fire and civil defence joint boards. That is a contribution that will be on its way to achieving the target of a saving of £100 million.

Mr. William O'Brien: Will the hon. Gentleman give way?

Mr. Shaw: Indeed.

Mr. O'Brien: I am grateful to the Minister for allowing me to make a point about West Yorkshire. Reference was made to the increase in the West Yorkshire precept. Will the Minister accept that West Yorkshire faces particular problems, to the extent that the police authority is demanding extra personnel? I hope that the Minister will consider those problems when the precept for the West Yorkshire constabulary is reviewed. Will he also consider the new police authority's request for an increase in the expenditure that is required to maintain a viable police force in West Yorkshire?

Mr. Shaw: I welcome the hon. Gentleman's intervention. I should like to think that both he and I are at one in our commitment to a full, effective and efficient police service in West Yorkshire, which both of us are proud to represent. The hon. Gentleman will be aware that there are vacancies in West Yorkshire's police establishment. In the discussions between the joint authority and the Home Office, the authority asked for a higher contingency allowance in its budget to offset, for example the possible costs of a renewal of the kind of problem that it experienced during the miners' dispute. It sought a higher contingency allocation rather than additional funds for uniformed officers. The announcement that I have just made means that the police grant moves from the 50 to the 51 per cent. level. The effect in West Yorkshire will be to improve its position by £2·1 million. Its claim for additional precept was £425,000. Therefore, this evening's announcement will provide West Yorkshire with what it originally sought, and it should also enable it to reduce the maximum precept by up to 1p. That will be of immense benefit to the payers of the precept in West Yorkshire.
We attach great importance to the level of policing in the metropolitan areas. They are the major inner city areas in the country. My right hon. Friend the Home Secretary looks to the new joint authorities to budget so that forces can recruit up to their police establishment in the course of the year and maintain the balance of police and civilian manpower which he will approve in their establishment and support services schemes. Because of the change announced today, they should be able to provide this level of service, and also set a precept below the maximum levels which are proposed in this order. Because my right hon. Friend the Secretary of State for the Environment is making available a further £22 million in block grant, there will be no loss of grant for other authorities or any other services.
As far as the fire service is concerned, I and my colleagues have consistently and clearly explained the


Government's policy towards the new fire and civil defence authorities, both during the passage of what is now the 1985 Act and on other occasions. I must again assure the House that we have made every effort to ensure that the fire service can be transferred to the new authorities on 1 April with its efficiency and morale undiminished. From the very early days, undertakings have been given that all existing fire brigade staff—both uniformed and civilian—would be transfered as a group by means of an order made under section 52 of the 1985 Act. This will be fulfilled on Thursday when my right hon. Friend the Secretary of State for the Environment lays the Local Government reorganisation (Designation of Staff) Order 1986, the provisions of which allow for the transfer of all the brigade staff, even those recruited up to that very day. We have also said that, while we believed that the fire service could be managed in a manner that would achieve greater value for money, any savings would be compatible with the 1978 pay agreement. Our proposals in the draft order are consistent with these policies. I regret that members of the fire service have not been made sufficiently aware of the adequacy and sincerity of the Government's commitment on these issues and that they have been caused needless concern by the attitude of some fire authorities and the stance taken on abolition by the largest fire service union, the Fire Brigades Union.
As hon. Members who, like me, took part in the debates on the 1985 legislation will recall, our main undertaking was, in effect, that the new authorities would be enabled to maintain broadly the level of service at present obtaining in their areas.

Mr. Allen McKay: Does the hon. Gentleman recall his undertakings during the debates on the abolition Bill that the fire service would remain at correct strength? I admit that South Yorkshire is not covered by the legislation, but it will be affected. Fire services overlap boundaries because they need to back each other up. Even after redetermination, South Yorkshire will only just be able to keep the present number of pumping appliances on the road. It is short of personnel. Before abolition the authority was trying to build up numbers. My information is that it will be short of 30 people, which will create difficulties in manning the appliances.

Mr. Shaw: I note that observation, but I think that the hon. Gentleman will agree that the arrangement between the Home Secretary and South Yorkshire is satisfactory. So far as I am aware, they are not in dispute about the precept that has been levelled. The hon. Gentleman is understandably concerned about how the new fire authority in South Yorkshire will distribute the resources that it is obtaining under the precept order. I assure the hon. Gentleman that my right hon. Friend the Home Secretary will be extremely concerned to ensure that the scale of appliances and the civil staff who support the fire service are at the levels required to operate efficiently. I shall look into that point and, if I find that the position in South Yorkshire is not satisfactory, I shall write to the hon. Gentleman as soon as possible.
The 1985 Act established that all the levels of service currently obtaining should obtain in the new areas. I believe that the maximum precept already with four of the new authorities meets this end and, given the political will

by the new authorities to use the resources available to them with maximum efficiency and economy, this will be the position in the other three areas. Even our most determined critics cannot disguise the fact that the differences between the Government and the three services of the fire authorities with which we are not in total agreement are small—equivalent to the product of an additional precept of 0·37p in Greater Manchester, 0·64p in Merseyside and, on its own standstill budget, 0·45p in West Yorkshire.
I recognise that many hon. Members will have been subjected to lobbying or questions by those associated with the abolition authorities or the Fire Brigades Union. As a West Yorkshire Member, I have experienced the fallout from such lobbying. In the main, the lobbying has revolved around the maintenance of the nationally recommended minimum fire cover standards to which successive Home Secretaries, including my right hon. Friend, have attached such importance. That commitment was made clear during the passage of the 1985 legislation.
In West Yorkshire the new authority has accepted proposals made by the outgoing authority for creating an additional 94 whole-time posts during 1986–87 and 1987–88. It is my right hon. Friend's policy to agree to net increases in manpower for the new authorities only if he is satisfied that no compensating economies can be found. In fact, the position is that whole-time uniformed manpower in West Yorkshire has increased since the end of 1981 by 93 persons. The precept for 1986–87 permits continuation of the manpower levels which the existing authority provides.
During that year Her Majesty's Inspectorate of Fire Services will look closely at the case for increased manning of pumping appliances in the light of the recent study of fire cover in the county and will examine with the fire authority whether compensating savings can be found. Only if they cannot be found after a genuine and determined attempt by the new authority to do so will my right hon. Friend the Home Secretary agree to increases in manpower. Meanwhile, I wish to assure hon. Members, including the hon. Member for Normanton (Mr. O'Brien), that there is no question of there having to be a deterioration in the present levels of service. The intention is that fire cover in West Yorkshire should be adequate to meet the needs of its area, and be based on a well-run and efficient fire brigade aiming for an even higher level of service.
Many hon. Members know full well the extent to which this local government reorganisation has been accompanied throughout by claims that the fire service in particular will be at risk. The GLC published reports saying that 1,400 posts were to be axed. I seem to recall that in the Committee that dealt with what is now the 1985 Act there were many occasions when claims of that order were made. There were further proposals for 10 fire stations to be closed, with 44 appliances to be withdrawn from service.
In reality, after carefully reviewing its inheritance with any eye to achieving greater effectiveness and economy, the new authority in London has submitted a fire brigade establishment incorporating a more efficient and decentralised management structure, and a reduction of 300 uniformed posts. This reduction will be achieved by natural wastage, and most significantly, in view of the scare stories which were put out at the time, not one


pumping appliance will be withdrawn from service. As I mentioned earlier, the London authority has accepted the precept announced by my right hon. Friend.
Finally, let me make clear what this order will do, and what it will not do. It will set for the six joint authorities to which it applies the maximum precept which they may make for 1986–87, but it will not fix the precept which they will actually make. That is a matter for each joint authority to decide for itself within the maximum. Nor does the order limit the discretion of the joint authorities to decide how to use their resources. It only limits the contribution that they can obtain from the ratepayer to the total resources for 1986–87. I trust that the House will agree that the police, fire and civil defence services are vital.
It is right that we should look very carefully at the representations which the joint authorities have made to us about the level of precept required. I hope that I have made it clear that we have done just that. Seven of the 13 joint authorities have agreed a maximum precept with us. Six have not, but the differences are not great. In three cases the difference is less than half a penny on the precept. Only one, and that is the West Yorkshire fire authority, to which I have made particular reference, is proposing a significant increase in manpower levels, and only in that area does the difference exceed a penny on the precept.
I assured hon. Members during the passage of the Local Government Bill that we did not intend to operate these controls in a draconian or arbitrary manner. It should be clear to the House, from the extent of the agreement that has been reached with the new authorities, that we have fulfilled that assurance.
In the light of the position, and in the light of the changes made in the police grant in particular, I trust that the House will accept the precepts. In view of the assurances that I have given, I ask the House to approve the order.

Mr. Alf Dubs: I feel that the Minister sounded just a trifle uncomfortable and a bit on the defensive, particularly as regards the fire services. Admittedly, he has the advantage of the Home Secretary's announcement about increased money for the police, but I feel that on the question of adequate fire cover in the three particular areas covered by this order the Minister will not have convinced the whole of the House with his arguments.
What we have, after all, is a highly centralised system. We have a system under the Local Government Act and under the Rates Act, and we have a system which allows of very high control indeed through the setting of the maximum precept, or precept capping, as I think we might call it. We also have the other powers which the Government have as regards setting control over the staffing levels. This means that many decisions which should normally be made locally about essential services are now being made in Whitehall. The Government's motives have to be somewhat suspect on this.
Going back to the Committee stage of the Abolition Bill, the Minister spent a great deal of time quoting the assurances that he had given, perhaps to make up for the fact that the figures which underlie the debate tonight do not give us those assurances. The Minister said:
There is no way in which the structural change of the authorities imposed by the Bill will alter the strength, costing and effectiveness of the fire services. In the case of the fire services, of course, it is largely because statutory duties are imposed, below which the expenditure, efficiency or equipment of the fire

services cannot fall. That is why the Home Office is enabled to ensure a standard structure of fire support throughout the counties.
That seems all well and good, but doubts must remain. Indeed, the Minister was under great pressure in Committee. When he was asked to give an assurance about the £100 million savings which was explained in relation to this part of the legislation, he said:
I doubt whether any would come from the fire services in relation to the money spent on manpower, equipment and services. There may be changes in some of the administrative support costs which will be transferred from the metropolitan counties to the joint board, as was shown in our debate earlier today on the police services." — [Official Report, Standing Committee G, 14 February 1985; c. 1416–7.]
I wonder whether that assurance is adequate. In Committee the present Secretary of State for the Environment, who was at that time the Minister of State, was also pressed for assurances. He said:
I repeat what my hon. Friend the Minister of State, Home Office said to the Committee about savings from joint boards —that the estimated £100 million rationalisation savings do not include any savings from the fire service, because we cannot expect significant savings of that kind on services which remain on a countrywide basis.
Let me also make it clear that we see scope for savings in the fire service, and we shall use the powers in clauses 64 and 80 to secure those savings.
The Minister said that manpower controls were required
to ensure that there is not a great explosion of the bureaucratic and organisation sides of the fire and police services after abolition … There may well be savings to be made as a result of the manpower controls." — [Official Report, Standing Committee G, 21 February 1985; c. 1569.]
Those are many protestations about how the legislation will work, but the reality is contained in this order.
Time and time again the House has applauded the work of the fire service in many of the recent, tragic disasters which have struck. We well remember the Brighton bombing, the fire at Bradford football ground, and the Manchester airport disaster. On all those occasions every hon. Member, including Ministers, applauded the work of the fire service in having saved lives and property. Although the order deals with the police and civil defence, as well as the fire service, and given the Minister's earlier comments about the Home Secretary's announcement, we must be most concerned about fire services.
Regarding Greater Manchester, my figures show that there is a shortfall for fire and civil defence — civil defence is a small part of the total — of £634,000 between what the authority wanted and what the Government would allow. In addition, there is a freeze on the recruitment of officers to the fire service. There is one difficulty about the police, which is about rent allowances for police premises, about which there is a judicial review. The result is that the decision has been frozen since 1 April 1984, so there are two years' back allowance, totalling £1,600,000, which should have been set aside. It is uncertain what will happen to that once the judicial review process is complete, assuming that the estimated figures are roughly right. Nevertheless, our main anxiety must be about the shortfall for the fire services.
The Minister will say, as he has said, that these are all efficiency savings, but it is hard to see how new authorities, which have no reserves to cushion them, can achieve efficiency savings, much as the Minister would wish them to. A similar problem arises in Merseyside, where the shortfall for fire and civil defence — again,


fire is the main item — is £700,000. That has many implications as the Merseyside authority has clearly explained.
First, to achieve the so-called efficiency savings, the existing command and control system, which cannot be maintained adequately beyond next year, must be deferred. Secondly, there will have to be manpower reductions, which must mean a reduction in the current levels of protection provided by the brigade. Thirdly, there will have to be a deferment of the replacement of appliances already retained longer than the official replacement programme. Fourthly, there will have to be some reduction in the maintenance of buildings and the replacement of equipment.
In addition, the Merseyside fire brigade's recruitment has been frozen. For every month that that freeze continues, the lower the numbers will be. I understand that the brigade is about 90 fire officers short of the Home Office figure. Perhaps the Minister will confirm that figure.
The Minister said that the Merseyside shortfall, and others, is intended to be achieved by efficiency savings. In contrast to the assurances given in Committee, that shortfall is to be achieved through unspecified means and arbitrarily. The authority has no financial reserves or spare resources, because its resources have already been cut to the bone. I say that despite the guidance note issued by the Home Office on 23 August 1985, which states:
The Home Secretary pledged not to impose arbitrary spending cuts on the fire service and that such cuts had never figured in the Government's calculation of estimated rationalisation savings resulting from abolition".
The assurances given, not least the one I have quoted, are at variance with some of the figures given by the Minister a few moments ago.
A further problem on Merseyside relates to how the system operates. The Department of the Environment has such a low assessment for grant related expenditure with the result that the Merseyside police authority is denied about £23 million of block grant and therefore the cost is being passed to the ratepayer. That does not affect the money that the police can spend. It affects where it comes from, unless the Minister's announcement today, when he quoted the Home Secretary, makes a difference to that figure.
My third point relates to west Yorkshire where the shortfalls for the police appear to be £480,000. That may have been overtaken by the overall increase announced today. What is more disturbing is that there is a shortfall of £2·75 million for the fire service. That includes a small element for civil defence.
The Minister said that was a shortage of about 90 fire fighters. He talked about the possibility of the Home Office considering whether some money could be made available if savings could not be made elsewhere.
There is a significant shortfall in the amount of money judged necessary by west Yorkshire to provide adequate safety standards. The Minister asserted that everything would be all right, and then half admitted that it was not because of the shortage of about 90 fire fighters. After all that has been said about the fire service, it is rather disturbing that the Minister can brush aside some of the difficulties aside and say that things will be all right in the end.
The fire service is stretched. It is working to its limit to contain serious fires. We must expect that, sadly, there will be serious, major fires in the coming year. I am worried that we may be sending some of the brigades into the coming year with inadequate resources to do their job. The Government say that they know best. Whitehall knows better than local people about what is needed to provide for the type of safety cover that the fire brigades should provide.
The Opposition are against the order in principle. We do not believe that the services should be subject to that type of centralised decision. We are worried because we believe that there is a threat to the safety standards provided by the fire service. That is why I hope that the House will vote against the order.

Mr. Terry Fields: I begin by declaring an interest. Unlike most well-heeled Conservative Members, my interest is not a financial one. I served for 26 years in the fire service, for more than 20 years as a member of the Fire Brigades Union, and for much of that time as an official of the union. I am now what is called an out-of-trade member, although I am not sponsored by the union. I have had experience of discussion and negotiation at every level, right up to national joint council as a member of the union's executive.
I joined the fire service in 1957. At that time the Fire Brigades Union was campaigning for a more professional attitude from Government to the fire service generally. Part of that campaign was for jobs and part for resources. I trust, therefore, that hon. Members will accept that I know a little about the subject.
For years, we sought the professional status that firemen deserve. Indeed, "Service for the Sixties," the plan drawn up in the 1960s by the union, pointed the way that the service had to take. We battled against Government Departments, chief fire officers and people who take the soft option, some of whom seem to believe that fire fighters are fodder, smoke-eaters who can get on with the job however bad the conditions.
Over the years, the Fire Brigades Union, despite opposition from Government and chief officers, has campaigned for a more efficient fire service, and much of that campaign has been on behalf of the general public. That efficiency has largely been achieved, but it has involved lockouts, dismissals and demonstrations on the part of firemen, not only for the good of the service but out of their commitment to the communities they serve. That dedication has resulted in firemen losing life and limb.
Against that background, I warn the House to beware some of the steps that the Government are proposing. It has taken tragedy, sometimes the loss of firemen's lives as well as the loss of life among the general public, to persuade Governments of all persuasions to act in the best interests of the public.
In the modern fire service, with sophisticated equipment, it is no longer a question of a couple of guys in the back of a wagon squirting water on flames. We must have highly trained men with the right appliances and equipment. Unfortunately, the finance that the Government are making available goes nowhere to meet that need.


I have been told that there are 89 vacancies in the Merseyside fire service and that, in the view of the Government, the money being made available should enable fire protection in the area to be broadly maintained. "Broadly" is a broad word to use. Originally, the Government intended to cut Merseyside's fire service budget by £1·8 million. That was reduced to £1·2 million. We in Merseyside, in the face of opposition from local Liberals and Tories, appealed for a redetermination and got the reduction lowered to £729,000.
That figure represents a loss of 80 jobs in the Merseyside fire brigade, in addition to the 89 that have already been lost, making a loss of 169 jobs among firemen in an area which is suffering great unemployment problems. About 80 per cent. of the budget for the service goes in wages. That must mean further job losses.
What will be the position following the disbandment of the metropolitan districts? The Liverpool revenue budget projection calls for £274 million. That represents an increase for local ratepayers of 16 per cent. The district's old expenditure projection amounted to £284 million. Thus, we are already £10 million down on what we really need. The district's new projected expenditure is £30 million down on what the Government are allowing for Liverpool. The figures show the difficulties that are in store.
In October last year at the Tory party conference the Prime Minister stated that the Government do not intend to economise and are not interested in doing so when life or property are involved. We do not take those weasel words at face value. The hypocrisy that the Government pursue in all their policies affects ordinary people and the services that they rely on.
We saw pictures in the paper and on television of the chairman of the Tory party with good old fireman Fred. He was saying what wonderful jobs the firemen were doing. After the Bradford disaster we heard the plaudits for the firemen. Recently, when the now deposed right hon. and learned Member for Richmond, Yorks (Mr. Brittan) was Home Secretary, he spoke at the chief fire officers conference. In line with Government policy, he referred to the future fire service having to become more cost-effective. He spoke of
the fire service not being exempt from the rigorous financial scrutiny which has to be applied to all Local Authority services.
That is the reality of what the Government are about.
In 1980, the Government sought to cut the standards of fire cover. The Fire Brigades Union, which they seek to denigrate, instituted a full inquiry into standards of fire cover. Despite that inquiry, the Government are hellbent on justifying reductions in the fire service. The previous Home Secretary's speech was made within 15 days of the dust settling at Brighton. So much for the Government's commitment to the fire services.
Tonight, at the same time as cutting the fire service, the police are getting their screw. They will receive additional money for bullets, riot shields and water cannon, but they will receive no co-operation from the fire service in the use of such apparatus.
The Fire Brigades Union estimates that about 1,800 jobs will be lost in the fire service as a direct result of the Government's financial constraints. In Merseyside in 1984, the Merseyside brigade attended 42,000 fire calls and saved 158 human beings. That is the highest rate in the country. If the Government seek efficiency, the job done by Merseyside in saving lives is the most efficient.

We are now 89 men down on establishment. The chief officer has been instructed to recruit up to establishment but he cannot guarantee a lifetime career to the young men coming into the service. Those young men in Liverpool and on Merseyside are the backbone for the future. They go through stringent entry examinations and they must be intelligent to deal with sophisticated techniques, but they are given no confidence in the fact that their jobs will be there for the future.
Liverpool has lost 65,000 jobs since the Government came to power. That has provoked despair, frustration and anger, which has led to riots in the inner city areas. The firemen have been in the front line of those battles. The fire service's role has nothing to do with quelling civil disturbances. The service is there to preserve life and property. We demand from the Government the correct expenditure to carry out our function.
My hon. Friend the Member for Battersea (Mr. Dubs) mentioned the control of the fire service—the dispatch of appliances and manpower to fight fires. That control on Merseyside needs a facelift to the tune of £1·8 million. How will the budget pay for that? The appliance replacement programme has been mentioned. Eight fire engines have already gone over the time limit laid down before they should have been put out of the service as surplus to requirements.
In the 1970s we negotiated with the chief officer a stand still on establishment while, with the financial restraints of the then Labour Government, we brought up the fleet to a proper level to deal with the needs of the people of the Merseyside area. We regained our establishment only through the good offices of a Labour Government and the struggle of the Fire Brigades Union to maintain standards.
We must understand what will happen when Merseyside county council is abolished. Before the 1975 reorganisation, we had what were called ghost establishments, where things were kept quiet and posts were not filled. We had two appliances manned by ore crew. When they needed a turntable ladder, the men on the pump would jump onto the turntable ladder. That is what we inherited, and we fear that that is the prospect for the future, with the reduction in manning and in the service that the union and the men wish to provide to ordinary people.
The Fire Brigades Union understands what this is about. We agree with what the Home Secretary said recently — that we are no different from any other service. Indeed, we are no different from the cuts in the hospital service, or from the cuts in social benefit and welfare; we are no different from the cuts imposed on pensioners and one-parent families. We understand why, despite what the Secretary of State said, those cuts will be made, jobs will be lost in the fire service and the cover to ordinary people will be reduced. It will be caused by the crisis in the system which the Government control.
The Government cannot match society's needs with its resources. Recently, Parliament debated the Channel tunnel, on which millions of pounds will be spent — some of it public money. The Government can spend money on weapons of destruction, but they cannot spend money on preserving lives and property through proper investment in the fire service. Nor will they protect lives by providing finance in the Health Service for dialysis machines.
It is ludicrous to expect firemen to become involved in civil defence. It is a confidence trick and a hoax, and the


Government will meet resistance from the Fire Brigades Union in this respect. I read nothing in the Estimates about the luminous paint that will be put on fire engines, and the chalk marks on firemen's backs, so that when a hostile nation sends across its nuclear weapons, firemen will be in a sanitised area. But that is what the Government are talking about in civil defence. The union is on record at last year's annual conference as reaffirming its policy of not going down that road.
The Minister was right to denigrate the Fire Brigades Union, as other Ministers have denigrated other unions prepared to fight for jobs for their industry and for the service that they provide to the community. The union has called several demonstrations; I spoke at one at Liverpool attended by 6,000 firemen, and we have had similar demonstrations at Manchester and Sheffield. Next week, we shall have a demonstration and lobby here in London. We wish only to draw attention to the problems of working people, but we give the Government a warning. At the Fire Brigades Union conference last week, the general secretary, winding up a debate calling for industrial action to defend jobs, said clearly that, at the first sign of a job lost in the fire service as a direct result of the Government's policies, conference would be recalled and the Fire Brigades Union national executive would recommend industrial action in defence of those jobs and in defence of services.
Firemen do not indulge lightly in such activities, but they will do it with the same commitment as they have to saving lives. We had to do it in 1977 on behalf of the community, to protect jobs and services and get the decent fire service to which people were entitled. We have fought hard to maintain standards in the fire service, and I believe that the young firemen who have joined recently will not easily give up their jobs and the decent standards of living for which they fought. Young firemen have gone through seven years of Tory policies; they have seen the social fabric destroyed and the economic base destroyed. People living in Merseyside have seen daily the results of the Government's policy — and they know that no one is safe under the Government, whether it be the ambulance service or anyone else. Even today, I heard reports from Liverpool that overspending by the ambulance department of Merseyside county council has meant that some ambulances are not running.
History has repeated itself for the fire service several times. The demonstrations in which the Fire Brigades Union has been involved throughout the decades have warned the public of the danger that there will be fewer fire fighters and appliances, slower attendance time, more severe fires, more property destroyed and many more deaths. This is not alarmist. This is the reality of the natural consequences of what the Government are doing. We give warning that the dedication and self-sacrificing attitudes of firemen—qualities to which the Government pay lip service—will be exercised and prominent in thwarting the Government in yet another attack on the British people and a group of workers such as those in the Fire Brigades Union. The Government had better watch out. If they are looking for an easy touch in cutting away the fire service as they have done everything else, they are in a for a big surprise. The Fire Brigades Union will not stand idly by and watch that happen.

Mr. Simon Hughes: The debate started with a shadow creeping in behind the Minister, in the form of the Secretary of State for the Environment, who said not many years ago—I quote again the words that were quoted to him so often when the Minister was in Committee last year—
In recent years there has been an increasing direction by central government over local government.
As the Minister will recall, our opposition in principle to the Local Government Act, and the rate capping that followed it, was that it was left to him and his colleagues to decide how much should be spent in the authorities created by that legislation.
We will all welcome the Minister's announcement of the additional 50 to 51 per cent. increase in grant to the police authorities in question. The additional £6 million is welcome. However, this is another example of the Government bringing in an announcement in an inappropriate way. The answer should have come in time for the debate, in a written answer form, so that hon. Members do not have to rely on hearsay or the Minister's announcement at the beginning of the debate. I ask him to take that point back to the Government. It is an inappropriate use of the power and the discretion of government to come up with a rabbit out of the hat at the last moment. We are glad of the money, but there are better ways to use Parliament and its procedures than to make announcements at midnight, when the debate is about to start.
The Minister said that this year there would be, as a result of the rate support grant settlement, an extra £22 million in block grant. It would be helpful if he could make it clear whether that applies to the three metropolitan counties that feature in the order, or the six metropolitan authorities, or the seven if the GLC is included. The figures are difficult enough in block grant terms, let alone the other problems about close ending and recycling.
As I understand it, the share of block grant, not the net figures—this applies to the funding of services such as the fire, police, the civil defence and the like — is marginally down, not up, this year. I understand that the figure for last year, is that 32·2 per cent. of what was given out to the counties of England was given to the metropolitan counties for services such as this, whereas this year the figure is down to 31·6 per cent. The second point is that the whole system is now increasingly difficult to plan for and manage in budget terms. I hope that the Minister will accept that now in February 1986, we cannot tell what moneys will go to these six authorities in the coming year, because there may be some grant recycling in the Department of the Environment, which has produced some speculative figures based on a £400 million sum. That means that there is enormous scope for adding to the figures and that treasurers cannot know how much will be made available to them in the coming year.
I understand that, when the Minister and some of his colleagues met deputations from some of the authorities including the Minister's, Ministers made it clear that it was estimated that there would be no significant charge to the ratepayer. That is not so. I understand that West Yorkshire gets £510 million of grant from the Government in 1985–86. After abolition, on 1 April, the districts and boards will get £486 million. If the districts and boards spent to the Government's guidelines, they would need


£89 million more than last year, but they are getting £24 million less. There is a shortfall of £113 million. The only way in which to raise that is by going to the ratepayer. That is one of the sets of figures that the Minister has to disprove if he is to establish that abolition and the new format for the police, fire and civil defence authorities will not present a net cost and disadvantage to ratepayers.
There is also an intrinsic contradiction in the system. The Minister and his colleagues set an expenditure limit, which is their assessment of need. Down the road in Marsham street, a grant-related assessment is set. There is often a substantial difference between the two. Is it not about time that we got an agreed figure? If the police, fire and civil defence authorities had to follow the GREAs, they would overspend grossly if they followed the Minister's expenditure limit and would lose grant because of it. It cannot be right for one Department to assess need at £50 million, and for the Home Office to say that it is £63 million, for example.
The figures this year, as before, increasingly do not work. That makes it even more difficult for authorities to plan — and they already have to contend with rate capping. Will the Minister undertake to consider a system that gives an agreed Government figure so that local authorities are not penalised because one figure is less than another? One of the problems that the different figures create is that, as the figures are revised during the year, it is even more difficult, because of the paraphernalia of legislation, to make proper advance planning of services. All that would have been solved if the amendment that I moved in Committee had been accepted, and rate capping had not applied. It was not, and we live to rue the day.
Is the Minister aware that Greater Manchester's assessment for fire and civil defence is that there will be a shortfall of about £634,000 in the next 12 months? As for the police authority there, what can the Minister tell us about the resolution of the question of the outstanding rent allowances? I understand that that sum is causing the difference of view between Greater Manchester and the Home Office. It must be resolved if there is not to be a shortfall of about £2 million in the next year.
Does the Minister agree that, in Merseyside, the ratepayer will pay more in the coming year for the same services than this year under the county council? That does not accord with what the Government promised. They want law and order to be sustained, but they are charging the ratepayer more. Where, then, lies the proof that abolition is saving money? I believe that it is costing money, as we have always said.
As to the police authority in Merseyside, my information is that a grant of £22·5 million or thereabouts will be forthcoming based on expenditure at the grant-related expenditure assessment level, yet the redetermination that the Home Secretary went through, which is clearly of benefit, gave a figure of 28 per cent. over and above that, not allowing for all that to be paid in grant, which results in a grant loss because of the excess of expenditure even within the expenditure limit over and above the grant-related amount of expenditure. That is clearly a disadvantage to the policing of Merseyside. Can the Minister explain what he expects the authority to do, given that it is being penalised in this way?
Taking last the Minister's own authority of west Yorkshire, that gives the best example, I hope he will accept, of the ludicrousness of the figures. The Department of the Environment says that just over £50

million is required by the police authority in west Yorkshire. The redetermined expenditure limit according to the Home Office is £63 million. Which is it? Presumably the Minister will stand by his own figures, in which case he has to tell his colleagues down the road that £50 million is wrong, £63 million is right and there should, therefore, be no discrepancy between the two. I understand that the chief constable said that he wanted slightly more even than the higher expenditure level. That means that even now the authority will be squeezed. If that is right, and the authority had accepted the Department of the Environment figures, there would have been a substantial loss of police establishment — and we are talking of hundreds, if not thousands, of officers. Clearly that will not happen, because I think even the Home Office figures the position remains that west Yorkshire says it needs 100 extra police officers. Will it get them? If so, who will pay?
The conclusion, after considering the specifics, is that the Government rightly say that law and order and services for upholding the security of our metropolitan communities and for security from fire have to be preserved. What they are now having to tell the ratepayer is: we will set the level at which you have to keep the services, but we will ask you to pay more—our new system is going to cost you. Is that really honouring the promises that were made when the legislation was introduced?

Mr. Giles Shaw: The main points raised by the hon. Member for Battersea (Mr. Dubs) related to the Merseyside and Greater Manchester fire authorities.
The new Merseyside fire authority applied for an expenditure level in 1986–87 of £28·5 million. The maximum precept of 7·19p described in the draft order implies an expenditure of £28·1 million. I accept that the hon. Gentleman is correct and that this represents a shortfall. The shortfall will be absorbed by a gradual reduction in the establishment of some 60 firemen posts achieved solely by natural wastage. This can be achieved with no significant change in the service provided to Merseyside, and will help to keep down the rates.

Mr. Terry Fields: The Minister is telling us that we will lose 60 posts in a brigade which has a record of the highest number of fire calls and the greatest saving of life with no lowering of standards. That is a ludicrous statement. A cut in the level of service provided to the people of Liverpool will mean greater potential danger to life and property in the Merseyside area.

Mr. Shaw: I understand the hon. Gentleman's total and laudable commitment to the fire brigades and his great experience of operating within that service, but it is essential that joint boards or shire county authorities which are seeking a given level of expenditure for police and fire services should provide evidence that they can run their services efficiently. That is what ratepayers wish to see —that the services supplied are appropriate to meet the minimum standards of fire cover laid down by the service itself and endorsed by the fire inspectorate. That is the way the services have traditionally been run and I am sure the hon. Gentleman would wish them to continue in that way.
The hon. Member for Battersea also referred to Greater Manchester. The precept level prescribed in the draft order will not present the new authority with difficulties. The limit of 9·52p implies expenditure of £41 million. which is 0·6 per cent. less than the authority applied for. In


fairness, I think the hon. Gentleman said that that was the shortfall, but the prescribed limit represents an 8·5 per cent. increase on the budget of the existing authority for 1985–86 at outturn prices and a hefty 22 per cent. increase on the 1984–85 figures of actual expenditure. The fire service in Greater Manchester has continued to grow substantially.
The hon. Member for Battersea referred too to the position in West Yorkshire, as did the hon. Member for Southwark and Bermondsey (Mr. Hughes). In my opening remarks, I did not go into great detail on the police service in West Yorkshire. I think that, on the whole, the House was satisfied with what I said. There are the shortfalls in the fire service in West Yorkshire that the hon. Member for Battersea suggests. Of course, I have already said that there will be a review this year by HM inspectorate in West Yorkshire to see whether efficiency savings can be made. If they can be achieved without any loss of fire cover, that is a reasonable aim. If not, my right hon. Friend will review the position at the end of the year.
The hon. Member for Liverpool, Broadgreen (Mr. Fields) has substantial experience with the fire service and I understand how he feels about a precept which does not provide the level of expenditure which he wishes to see on Merseyside. Under the legislation, for the first three years, and for three years only, the Home Secretary has the unique power to set the maximum precept. He will discharge that duty with thoroughness and efficiency. There are many competing sources of expenditure within local government and none more so than in the metropolitan districts. The hon. Gentleman will know that it is up to Government to ensure that the services are all funded properly and efficiently but not extravagantly. [Interruption.] I hear the hon. Gentleman's remarks. He will know full well that no one in the House, and certainly not I, would resile for one minute from supporting the fire brigades in what they do. The gentlemen who man the fire brigades and the men and women who are involved in the support services have provided an astonishing level of service during the last year.
The hon. Member for Southwark and Bermondsey raised some broader issues. He must not expect me to respond on behalf of my right hon. Friend the Secretary of State for the Environment. My right hon. Friend the Home Secretary made an announcement earlier today on the block grant, because he had a direct interest in providing the House with the necessary information to debate the fire and police services tonight. That was the quickest means available to him. I have told the House what he has decided.
The £22 million to which I referred will be spread over all local authorities. The joint boards which are the subject of the precept order will not be the only beneficiaries, although they will benefit the most because they are the largest authorities responsible for police and fire services. Each county will also benefit in its own way from the block grant of £22 million being made by my right hon. Friend the Secretary of State for the Environment.
London will be a major beneficiary of the changes announced today. It will benefit by about £17·8 million from the increase in the police grant which has been provided for today. I say to the hon. Member for

Southwark and Bermondsey that all authorities will benefit but, largely, the benefit will go to the areas we are discussing—the joint board areas for fire and police.
The hon. Member for Southwark and Bermondsey contrasted the assessments made in the Home Office expenditure levels for police and the assessments under grant-related expenditure — the regime applied by the Department of the Environment. I respect and understand why he should make that point. The hon. Gentleman will equally know that, under the Act, whereby the Home Secretary has the power to set the maximum precept levels, he will operate that for three years only; whereas GRE, or the funding of local authorities, is continuing, although it has changed from time to time. The announcement today went some way towards recognising the principle of what the hon. Member for Southwark and Bermondsey said.
If two policies are clearly directed for their own perfectly legitimate ends—one to encourage a rate of police expenditure, the other to determine the grant-related expenditure, which is not a specific amount of money related to police needs but an equalisation of policing needs, the two figures are not easily shown to be compatible. It is to start to close that gap that the announcement was made today, first in relation to a block grant increase and secondly in relation to a 1 per cent. increase in the police grant. Although the announcement is in respect of 1986–87, I think that the hon. Member for Southwark and Bermondsey and the House will conclude that it may be difficult to change the police grant back from 51 per cent. to 50 per cent. in subsequent years. That is a decision about which my right hon. Friend will have to consult his colleagues.
The hon. Member for Southwark and Bermondsey raised the matter of the Greater Manchester rent allowance in relation to the police. I agree that there is a problem but I believe that it has now been resolved. I understand that when the authority asked for its maximum precept to be increased to allow extra expenditure on back rent allowance, we agreed after consideration that it could fund that allowance within existing precept levels. That is why we made no change.
In addition to the points that I have already made I must emphasise that under the revised precept level there should be no doubt that police recruitment in West Yorkshire should enable vacancies — currently about 130 on establishment—to be filled. I hope that it will be able to move to that in the coming year.
My right hon. Friend has invited the chief constables of the provincial forces to conduct a review of police establishment needs. Where a need for additional establishment can be proven beyond doubt, my right hon. Friend has agreed to ask the inspectorate to advise him whether the needs should be met. I expect that such assessment will take place during the current month, so it is continuing.
The debate has been pertinent to the order. It has been a matter of reviewing how the mechanism will work. I trust that what I have been able to tell the House is sufficient to persuade hon. Members to allow the precept order to pass.

Question put:—

The House divided: Ayes 170, Noes 118.

Division No. 69]
[12.10 am


AYES


Alexander, Richard
Mackay, John (Argyll &amp; Bute)


Amess, David
Maclean, David John


Ancram, Michael
Major, John


Arnold, Tom
Malins, Humfrey


Ashby, David
Malone, Gerald


Aspinwall, Jack
Maples, John


Atkinson, David (B'm'th E)
Marlow, Antony


Baker, Rt Hon K. (Mole Vall'y)
Marshall, Michael (Arundel)


Baker, Nicholas (Dorset N)
Mather, Carol


Baldry, Tony
Maude, Hon Francis


Bellingham, Henry
Maxwell-Hyslop, Robin


Bendall, Vivian
Mayhew, Sir Patrick


Benyon, William
Mellor, David


Best, Keith
Merchant, Piers


Biffen, Rt Hon John
Meyer, Sir Anthony


Biggs-Davison, Sir John
Miller, Hal (B'grove)


Blackburn, John
Mills, Iain (Meriden)


Bonsor, Sir Nicholas
Mitchell, David (Hants NW)


Boscawen, Hon Robert
Moate, Roger


Bottomley, Mrs Virginia
Montogomery, Sir Fergus


Bowden, Gerald (Dulwich)
Mudd, David


Brandon-Bravo, Martin
Murphy, Christopher


Bright, Graham
Neale, Gerrard


Brinton, Tim
Nelson, Anthony


Brooke, Hon Peter
Newton, Tony


Bruinvels, Peter
Nicholls, Patrick


Buck, Sir Antony
Norris, Steven


Budgen, Nick
Page, Sir John (Harrow W)


Burt, Alistair
Page, Richard (Herts SW)


Butterfill, John
Parris, Matthew


Carlisle, Kenneth (Lincoln)
Pawsey, James


Channon, Rt Hon Paul
Percival, Rt Hon Sir Ian


Chapman, Sydney
Pollock, Alexander


Chope, Christopher
Portillo, Michael


Clark, Dr Michael (Rochford)
Powell, William (Corby)


Clarke, Rt Hon K. (Rushcliffe)
Powley, John


Coombs, Simon
Raffan, Keith


Cope, John
Rhodes James, Robert


Couchman, James
Rhys Williams, Sir Brandon


Cranborne, Viscount
Ridley, Rt Hon Nicholas


Currie, Mrs Edwina
Roberts, Wyn (Conwy)


Dickens, Geoffrey
Roe, Mrs Marion


Dorrell, Stephen
Rossi, Sir Hugh


Douglas-Hamilton, Lord J.
Rost, Peter


Dover, Den
Rumbold, Mrs Angela


Durant, Tony
Ryder, Richard


Dykes, Hugh
Sackville, Hon Thomas


Eggar, Tim
Sainsbury, Hon Timothy


Emery, Sir Peter
Sayeed, Jonathan


Evennett, David
Shaw, Giles (Pudsey)


Fallon, Michael
Shaw, Sir Michael (Scarb')


Favell, Anthony
Shelton, William (Streatham)


Forsyth, Michael (Stirling)
Sims, Roger


Garel-Jones, Tristan
Smith, Tim (Beaconsfield)


Greenway, Harry
Speed, Keith


Gregory, Conal
Spencer, Derek


Griffiths, Sir Eldon
Stanbrook, Ivor


Ground, Patrick
Stanley, Rt Hon John


Hamilton, Hon A. (Epsom)
Stern, Michael


Hampson, Dr Keith
Stevens, Lewis (Nuneaton)


Hanley, Jeremy
Stewart, Allan (Eastwood)


Harvey, Robert
Stewart, Andrew (Sherwood)


Heddle, John
Stradling Thomas, Sir John


Henderson, Barry
Sumberg, David


Hogg, Hon Douglas (Gr'th'm)
Temple-Morris, Peter


Holt, Richard
Thomas, Rt Hon Peter


Hubbard-Miles, Peter
Thompson, Donald (Calder V)


Hunt, David (Wirral W)
Thompson, Patrick (N'ich N)


Key, Robert
Thornton, Malcolm


Knight, Greg (Derby N)
Townend, John (Bridlington)


Lamont, Norman
Tracey, Richard


Lawler, Geoffrey
Trippier, David


Lewis, Sir Kenneth (Stamf'd)
Trotter, Neville


Lightbown, David
Twinn, Dr Ian


Lilley, Peter
Waddington, David


Lloyd, Peter (Fareham)
Waldegrave, Hon William


Lord, Michael
Walden, George


Lyell, Nicholas
Waller, Gary





Ward, John
Winterton, Nicholas


Wardle, C. (Bexhill)
Wolfson, Mark


Watson, John
Wood, Timothy


Watts, John
Yeo, Tim


Wells, Bowen (Hertford)
Young, Sir George (Acton)


Wells, Sir John (Maidstone)



Wheeler, John
Tellers for the Ayes:


Whitfield, John
Mr. Michael Neubert and


Winterton, Mrs Ann
Mr. Mark Lennox-Boyd.




NOES


Adams, Allen (Paisley N)
Hughes, Simon (Southwark)


Archer, Rt Hon Peter
John, Brynmor


Atkinson, N. (Tottenham)
Jones, Barry (Alyn &amp; Deeside)


Banks, Tony (Newham NW)
Kaufman, Rt Hon Gerald


Barron, Kevin
Kennedy, Charles


Beith, A. J.
Lambie, David


Bell, Stuart
Lamond, James


Bennett, A. (Dent'n &amp; Red'sh)
Leadbitter, Ted


Bermingham, Gerald
Leighton, Ronald


Blair, Anthony
Lewis, Ron (Carlisle)


Boyes, Roland
Lewis, Terence (Worsley)


Bray, Dr Jeremy
Litherland, Robert


Brown, Gordon (D'f'mline E)
Lloyd, Tony (Stretford)


Brown, N. (N'c'tle-u-Tyne E)
Lofthouse, Geoffrey


Caborn, Richard
Loyden, Edward


Callaghan, Jim (Heyw'd &amp; M)
McCartney, Hugh


Campbell-Savours, Dale
McDonald, Dr Oonagh


Canavan, Dennis
McTaggart, Robert


Carlile, Alexander (Montg'y)
McWilliam, John


Clark, Dr David (S Shields)
Madden, Max


Clarke, Thomas
Marek, Dr John


Clay, Robert
Martin, Michael


Clelland, David Gordon
Maxton, John


Clwyd, Mrs Ann
Michie, William


Cocks, Rt Hon M. (Bristol S)
Millan, Rt Hon Bruce


Cohen, Harry
Morris, Rt Hon J. (Aberavon)


Cook, Frank (Stockton North)
Nellist, David


Corbyn, Jeremy
Oakes, Rt Hon Gordon


Cunliffe, Lawrence
O'Brien, William


Dalyell, Tam
Orme, Rt Hon Stanley


Davies, Rt Hon Denzil (L'lli)
Park, George


Davies, Ronald (Caerphilly)
Parry, Robert


Davis, Terry (B'ham, H'ge H'l)
Pike, Peter


Deakins, Eric
Powell, Raymond (Ogmore)


Dewar, Donald
Prescott, John


Dixon, Donald
Radice, Giles


Dormand, Jack
Randall, Stuart


Dubs, Alfred
Redmond, Martin


Duffy, A. E. P.
Richardson, Ms Jo


Eadie, Alex
Roberts, Allan (Bootle)


Eastham, Ken
Rogers, Allan


Evans, John (St. Helens N)
Rowlands, Ted


Ewing, Harry
Short, Ms Clare (Ladywood)


Fatchett, Derek
Short, Mrs R.(W'hampt'n NE)


Fields, T. (L'pool Broad Gn)
Skinner, Dennis


Fisher, Mark
Smith, C.(Isl'ton S &amp; F'bury)


Flannery, Martin
Soley, Clive


Forrester, John
Spearing, Nigel


Foster, Derek
Stott, Roger


Foulkes, George
Strang, Gavin


Freud, Clement
Thompson, J. (Wansbeck)


George, Bruce
Thorne, Stan (Preston)


Gould, Bryan
Wardell, Gareth (Gower)


Hamilton, James (M'well N)
Wareing, Robert


Hardy, Peter
Welsh, Michael


Harrison, Rt Hon Walter
Winnick, David


Haynes, Frank
Young, David (Bolton SE)


Hogg, N. (C'nauld &amp; Kilsyth)



Home Robertson, John
Tellers for the Noes:


Hoyle, Douglas
Mr. Sean Hughes and


Hughes, Robert (Aberdeen N)
Mr. Allen McKay.

Question accordingly agreed to.

Resolved,
That the draft Local Government Act 1985 (Police and Fire and Civil Defence Authorities) Precepts Limitation Order 1986, which was laid before this House on 30th January, be approved.

Orders of the Day — Passenger Transport Authorities'

The Minister of State, Department of Transport (Mr. David Mitchell): I beg to move,
That the draft Precept Limitation (Passenger Transport Authorities) (Prescribed Maximum) Order 1986, which was laid before this House on 29th January, be approved.
The House will know that in a few weeks time the six metropolitan counties will pass largely unmourned into history. Their public transport activities will be carried on by new joint boards made up of representatives from each of the districts within the former metropolitan counties. Under the Local Government Act 1985, these joint boards were designated for precept control for their first three years. This means that the Secretary of State for Transport sets an upper limit on the amounts which the new joint board passenger transport authorities may charge local ratepayers.
The Government have sought agreement with the new joint boards as to their maximum precepts for 1986–87. Agreement has been reached with the West Midlands and with Tyne and Wear joint boards, but we have not found it possible to achieve this in Greater Manchester, Merseyside, South Yorkshire and West Yorkshire. The order laid before the House on 29 January therefore sets an upper limit for the precept of those four authorities. We have had several months of discussion with the joint boards about the appropriate level of their expenditure in 1986–87. The order before the House is the outcome of those discussions and the consequences of the failure of four of the six metropolitan counties to reach agreement with the Government on their maximum precept.
Perhaps it would be helpful if I explained a little of the background to these differences of view. Until not so long ago, the typical traveller paid for public transport through the fare box. People paid for their bus tickets, and so on, in much the same way as they paid for their food or their clothes or any other expenditure which they chose to undertake. But in recent years the practice has grown up of subsidising bus operators to run bus routes which did not have sufficient passengers to be viable, and, in addition, some authorities have given subsidies to the bus operators to reduce their fares below the economic cost.
It is possible to compare the amount of this subsidy in different parts of the United Kingdom in a form which adjusts for differences in population by looking at the cost per person in different counties. For example, in Oxfordshire public transport subsidies amount to £2 per person per year, to provide concessionary fares to certain groups and bus services to communities which would otherwise be isolated. Looking across the counties of England, one can see a number of counties where the amount per person spent in subsidising bus services is somewhat greater.

Mr. Tony Banks: Will the Minister admit that in counties such as South Yorkshire the electors have shown time after time, by voting Labour, that they entirely approve of the transport policies of those local authorities? Why does the hon. Gentleman not put it to the test and let the people decide at the ballot box?

Mr. Mitchell: If the hon. Gentleman will allow me to complete my argument, he will find that I cover that point. One can ascertain the amount of expenditure in different

counties on a comparable basis. Expenditure per person on subsidising bus services is £2 in Oxfordshire, £3 in Warwickshire, £6 in Hampshire and £13 in Lancashire. Some authorities have taken this to ridiculous lengths. For example, the expenditure on transport per head of the population in West Yorkshire is £23—compared with £2 in Oxfordshire —in Greater Manchester it is £30, in Merseyside it is £53 and in South Yorkshire it is £60. This is paid by the ratepayer. This is a degree of extravagance which has expremely unfortunate consequences for the ratepayers. In West Yorkshire last year the total rate in the pound—county plus districts—was 209p. In Manchester the figure was 228p, in Merseyside 246p, and in South Yorkshire 269p.

Mr. Robert N. Wareing: Does the Minister realise that when the cheaper fares policy was introduced by the Labour-controlled Merseyside county council in 1981 the Liverpool stores committee was wholly against it, but when it saw the upturn in passenger users it was wholly in favour of the cheap fares policy—and those people are not used to voting Labour?

Mr. Mitchell: Any store that is to have its customers brought to its door at a subsidised rate will be in favour of that. What would the hon. Gentleman expect? The position here is that the shire counties' average is 181p in the pound, whereas for South Yorkshire it is 269p in the pound as a result of this extravagant expenditure.
That is not all of the story. Each of these metropolitan counties, in a rake's progress of expenditure, was spending its reserves as if money had gone out of fashion last year, so that people living in those areas enjoyed the benefit of cheap fares at a cost far in excess of the income of the authority. It is like someone blowing his life savings and living the life of Riley, which can go on only until the savings have run out and the party is over. That is the situation in the metropolitan counties. The party is over.

Mr. Allan Roberts: Does the Minister agree that if he ratecaps the Merseyside passenger transport authority, and if it takes over Liverpool airport, which loses money, it will have the choice of either closing the airport or of subsidising it, as a consequence of which it will have to cut its bus services, because it does not have the money to do both? Does that not mean that Liverpool airport is likely to close unless it is subsidised? If it is not subsidised, bus services will not be provided in Merseyside. Does the Minister want Liverpool airport to close?

Mr. Mitchell: The hon. Gentleman knows that decisions about priorities are for the PTA. It is not for Ministers to lay down what should be done.
I can well understand the hon. Gentleman seeking to intervene when he did, because I was just about to draw attention to the extent to which local authorities in those areas overspent their income last year and drew on their reserves. The spending of the county council and PTE reserves in 1985–86 was equivalent to an additional precept of 27p in West Yorkshire, 22p in Greater Manchester, 23p in Merseyside and 21p in South Yorkshire. In short, last year the expenditure was much greater than the income, and this year the ratepayers are paying according to what is spent. That is why so many screams are coming from certain quarters.

Mr. Derek Fatchett: Is it the Minister's argument that because the people of West Yorkshire and other counties have voted for this sort of passenger transport system he feels that he is justified in taking it away, and that what he really wants to do on the figures that he has quoted is to reduce the quality of service, so that what we receive in the metropolitan counties will be equivalent to what is received in the shire counties? The Minister's argument is not about levelling up or about saving the ratepayer, it is about cutting services. Why does he not have the courage to admit that to the House?

Mr. Mitchell: I am far more concerned about striking a proper balance between the interests of bus travellers and ratepayers. Ratepayers have been raped in so many places that it is high time they received a square deal.
Hon. Members may ask why a local authority should seek to spend on such a colossal scale compared with the level of expenditure in other parts of the country, and the answer is simply that Left-wing politicians realise that bus travellers have votes, but that those who pick up the rate bill often do not. It was cheap for councillors to spend extravagantly on subsidising the voters' bus services, and they saw little disadvantage in pursuing the policy, since many of the ratepayers would be businesses, which do not have votes. It was cheap and nasty — cheap for the politicians, and nasty for the ratepayer. Unfortunately for them and the country, many such businesses can vote with their feet, and have done so. They have left constituencies and areas where high rates make it difficult to start a business.

Mr. Allan Roberts: rose—

Mr. Mitchell: I have already given way to the hon. Gentleman. Businesses have a life cycle. They start with people with new ideas, products, zest and enthusiasm. The grow, create employment, grow old, tired and staid, and, often, die. Their place is taken by new businesses, with new ideas, employing new people. In the metropolitan counties, because of the high level of rates, few new businesses have been started. The result is that we have the burden of unemployment in areas where that should not be so, and it has a significant effect.

Mr. Roberts: The right hon. and learned Member for Southport (Sir I. Percival), the hon. Member for Crosby (Mr. Thornton) and I represent the lowest rated metropolitan district. With such low rates and a Conservative council which has cut services to the bone and kept rates low, can the Minister explain why Sefton has a 30 per cent. unemployment rate and businesses are leaving the area? If rates drive businesses away, why should that be the case?

Mr. Mitchell: The hon. Gentleman will know that it is not merely the district rate, but the amount levied by the metropolitan county, which has caused high rates and driven businesses away. [Interruption.]

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. I remind the House, especially hon. Members wishing to catch my eye, and hon. Members making interventions that this is a short debate.

Mr. Mitchell: The result is that unemployment has remained desperately high in those areas. The Government should not wash their hands of the matter. One of the important reasons for the order is that we are starting on

the process of reducing the burden on ratepayers in metropolitan counties so that gradually there will be a better prospect for securing an increase in job creation and employment opportunities for those who live in those areas.

Mr. Simon Hughes: rose—

Mr. Mitchell: I have given way several times, and I am sure that the hon. Gentleman will seek to catch your eye, Mr. Deputy Speaker.
By the order the Government seek to set a maximum for the precept that may be charged by four of the six new joint board PTAs. The maximum precepts are set out in the schedule to the order as follows: Greater Manchester 19·99p, Merseyside 44·88p, South Yorkshire 44·07p, and West Yorkshire 26·51p. Total expenditure levels, which we determined in December are only some 3 per cent., in real terms, below the equivalent budgeted metropolitan county council expenditure this year, but that expenditure has been supplemented by some £35 million of PTE reserves. The underlying reduction in expenditure is more than 3 per cent. There is a long way to go, but the ratepayers can take hope from the fact that we are engaged in a programme which over three years will bring them to a more reasonable level of expenditure on transport services, and those thinking of setting up in business, and those who would be employed by firms starting in business, can look forward to more jobs as the rate burdens cease to distract and destroy business starting in the area.
We have also provided some immediate help to reduce the burden falling on ratepayers in the metropolitan counties in 1986–87. The additional police grant announced by my right hon. Friend the Home Secretary will provide some significant assistance. In addition, I should remind the House that in announcing the rate support grant settlement for the next financial year, my right hon. Friend the Secretary of State for the Environment stressed that any consequences of abolition would be subject to a safety net. This ensures that the total burden on ratepayers in the metropolitan areas is no greater as a result of abolition than it would have been if the metropolitan counties had continued to exist.

Mr. Wareing: That is not true.

Mr. Mitchell: The hon. Gentleman says that that is not true. It is true. He may be deceiving himself, because he has failed to take account of the £35 million of reserves which were blown last year in sustaining expenditure higher than the income received by the authorities.

Mr. Wareing: If the ratepayers will be better off under the system which the Minister is introducing, how much block grant will be paid to the joint boards for transport next year?

Mr. Mitchell: I have given the figures for the precept set by my right hon. Friend the Secretary of State. I should put that more correctly and say "the maximum precept" set by my right hon. Friend.
I recognise that the precepts that we are setting, despite those measures, are higher than we would have wished. However, the ratepayers would do well to contemplate how much larger the bill might have been had the authorities been able to continue their fantastic policies without restraint. The charge in Merseyside, for example, would have been 58p, or nearly 30 per cent. higher than


we propose that the authority should be allowed to spend. South Yorkshire would have needed a truly enormous precept of 66p—half as much again as will be required under our policies.
Instead of those grotesque amounts, we confidently expect that by the end of the three years of precept control metropolitan ratepayers will be enjoying the benefits of much reduced charges. The long-term benefits should do much to stimulate and revive the ailing economies of those areas. I commend the order to the House.

Mr. Roger Stott: I have no doubt that in your long experience in the House and in the Chair, Mr. Deputy Speaker, you have heard many remonstrations from the Opposition about the way in which we conduct our business. I do not wish to disappoint you this evening. We know of no other country whose Parliament would be debating the future funding of its public transport system at about 12.35 am for a maximum of one and a half hours.
I wish it to be firmly understood by the House, the Secretary of State and the Minister of State that the Opposition think that the procedure of introducing a statutory instrument whose contents have massive and wide-ranging consequences for millions of our people who use public transport every day is completely unacceptable.
To allow time for my hon. Friends who represent areas affected by the order, I shall not make a long and detailed critique of the Government's proposals. My hon. Friends will spell out in precise terms what it means for their county council areas.
Having spent a year of my life opposing the provisions of the Transport Act 1985 and having been locked in political and intellectual conflict with the Secretary of State—although for him the latter was hard—and with the Minister of State during the passage of that measure through the House, it gives me no pleasure to report that what my hon. Friends and I said at that time has proved to be true.

The Secretary of State for Transport (Mr. Nicholas Ridley): The hon. Gentleman talks of intellectual conflict. If his intellect does not tell him that the order before the House is made under the abolition measure and arises out of local government legislation and has nothing whatever to do with the Transport Act 1985, his intellect is sadly lacking.

Mr. Stott: If I had time, I would rebut that intervention. Regrettably, I do not have the time, so I will ignore it.
The deregulation of Britain's bus industry, allied to the abolition of the metropolitan counties, will prove to be a disaster. With the perspicacity of an ostrich, the Secretary of State continued to pursue the ludicrous idea that the free market could be visited on public transport, unfettered and without constraint.
Some of us suspected the real motives that lay behind the Transport Act 1985. That measure was simply a parliamentary vehicle by which the Secretary of State could reduce the Revenue support for public transport in the UK. Our worst fears about that measure are coming to fruition.

Mr. Matthew Parris: I recall the passage of the 1985 Act.

Mr. Tony Banks: Did the hon. Gentleman come by bus?

Mr. Parris: If reference is being made to the fact that I am wearing a dinner jacket, I am dressed in this fashion because I have been to the annual dinner of the Bus and Coach Council, where I sat next to Councillor Alec Waugh from South Yorkshire county council—

Mr. Deputy Speaker: Order. Interventions to speeches must be brief.

Mr. Parris: —who was wearing a considerably more expensive dinner jacket than I. I recall the hours of debate on the 1985 measure and the intellectual content. This order, however, does not derive from that measure, and I am still waiting to hear the hon. Gentleman's case.

Mr. Stott: I, too, attended the Bus and Coach Council annual dinner. I discarded my dinner jacket for this debate. If the hon. Member for Derbyshire, West (Mr. Parris) will remain in his place, I will educate him into the reasons why the Transport Act 1985 and the order are closely linked.
The order sets out the precept limits placed on the metropolitan counties of Greater Manchester, West Yorkshire, South Yorkshire and Merseyside. Tyne and Wear accepted the Government's original proposal. The only passenger transport authority for which a change has been made is the West Midlands PTA. The change results only from a technicality — a product of a penny rate used by the Department of the Environment, which has been miscalculated. All the PTAs, except those that I have just mentioned, have appealed against the decision, because of the severe damage that will be inflicted on their areas.
We are debating the amount of revenue, via a punitive GRE settlement, with which all the metropolitan counties must operate this year and early next year. South Yorkshire is represented this evening by my hon. Friend the Member for Sheffield, Central (Mr. Caborn). I hope that he will catch your eye, Mr. Deputy Speaker. During the past ten years, South Yorkshire has consistently returned a Labour-controlled county council that has administered a public transport system second to none in the world. As a consequence of the order—if the hon. Member for Derbyshire, West would pay attention—South Yorkshire will suffer horrendous job losses, route closures and fare increases.
The same can be said for the county of West Yorkshire. My hon. Friend the Member for Bradford, West (Mr. Madden), if he catches your eye, Mr. Deputy Speaker, will make that clear. As a direct result of the order, West Yorkshire envisages that in rural areas some communities could lose their service completely and Sunday services would be considerably reduced. Early morning services in suburban areas would be restricted and evening services would be limited.
In my county of Greater Manchester — my hon. Friend the Member for Heywood and Middleton (Mr. Callaghan) will have something to say later if he catches your eye, Mr. Deputy Speaker—the passenger transport executive has said that as a consequence of deregulation and the provisions in the order, 2,000 busmen and women will be made redundant, routes will be cut, and fares will be increased by 15 per cent.

Mr. David Sumberg: Will the hon. Gentleman put the matter into perspective? All those job


losses will come from what is inappropriately termed natural wastage. No-one will be put on the scrap heap. Already, people have applied to the authority to be included on the redundancy list.

Mr. Stott: People may be applying for retirement or early redundancy, but I do not accept the premise of the hon. Member for Bury, South (Mr. Sumberg). A considerable number of people will be forced into redundancy against their will as a result of the provisions.
That is the Greater Manchester executive's estimate, which has been demonstrated to the hon. Gentleman and to all hon. Members who represent that area. The figure of 2,000 is similar to that in other areas of the United Kingdom where the implications of the order will come to fruition.

Mr. Mitchell: Does the hon. Gentleman deny that more than 2,000 people have already applied voluntarily for redundancy?

Mr. Stott: I do not believe that that is the case. The Greater Manchester transport executive— so far, these are the management figures— has told me and other hon. Members who represent that area that in its view, as a consequence of the order and bus deregulation there will be 2,000 less jobs. Even if those jobs are lost as a consequence of voluntary redundancy, it still means a net loss of 2,000 jobs in an area of high unemployment.

Mr. Allen McKay: The loss of 2,000 jobs there, and the 1,600 scheduled to go in South Yorkshire, are not only jobs but services. Those people drive buses. If they go, what will happen to the rural services in my constituency, such as those to Silkstone and Dumford Hazelhead? I know what will happen: there will be no buses.

Mr. Stott: Had we had a full and proper debate on the matter this evening, I have no doubt that my hon. Friend could have made those points in far greater detail. However, he has managed to get them on the record in this limited time.
I shall not discuss Merseyside, since I hope that my hon. Friend the Member for Liverpool, West Derby (Mr. Wareing) will do that, should he catch your eye, Mr. Deputy Speaker. However, I should point out that Merseyside gets no block grant. Under this order not one penny piece will go to Merseyside. It might get a few bob through surreptitious means, but the great conurbation of Merseyside will not get a penny under this order.
We are witnessing what my hon. Friends and I predicted in Committee. We are beginning to see job losses, poor services and the withdrawal of rural routes. There will be higher rates, because the ratepayers will have to pay for this, as a consequence of the transitional period and the redundancies that will be caused. As a result of the uncertainty in the bus market, which has been created by the Secretary of State, no one is buying buses and the bus manufacturing industry is in the doldrums. That is a direct consequence of the Transport Act 1984. I attended the Bus and Coach Council's annual dinner earlier this evening, with my hon. Friend the Member for Aberdeen, North (Mr. Hughes) and the hon. Member for Derbyshire, West. We did not have the advantage of having Hansard writers at that dinner, but I was sitting not too far away from the Secretary of State when he addressed

the dinner. If I do not have his words right, I will apologise to him; but if they are right. it is worth hearing what he said. He told the Bus and Coach Council:
You are now free to run your businesses without the constraint of a social conscience.

Mr. Parris: That is a misinterpretation.

Mr. Stott: If I have misinterpreted the Secretary of State, I shall be the first to apologise to him. But that is what I wrote down, and that is what I believe he said. That was precisely the motivation behind the Transport Act 1985 and this order. One and a half hours in which to debate Britain's transport policy and the movement of millions of people is an utter disgrace. I need not ask my hon. Friends to join me in the Lobby; I know that they will do it.

Sir Ian Percival: May I take a few minutes to try to bring the debate back to reality by relating it to my constituents? In Merseyside, there have been no fare increases since 1980; indeed, there have been decreases. No doubt that suits many people, especially those who do not pay rates, and I do not blame them for saying, "For goodness sake, reduce the fares even further". My constituents, who are not all wealthy people, bitterly resent—I agree with them—being forced to contribute money to allow others to travel at ridiculously uneconomic prices. [Interruption.] I see that the hon. Member for Liverpool, West Derby (Mr. Wareing) does not like what I am saying. I am glad that he does not, because it proves that I am making a point.
Last year, the council disguised this move by taking £8 million to £10 million — one cannot tell quite how much, because it is all covered up—out of reserves. That was done deliberately so that this year, following on abolition, the rates would have to go up by an equivalent amount. Let us cut the cackle and look at the facts. [Interruption.] Hon. Members may laugh—what is so funny about that? I feel about my constituents as I feel about my Government—I want to do my duty to both. The hon. Member for West Derby should keep quiet. I know that he does not like what I am saying, but why should my constituents, who are no better off than many of his, contribute to the travel of his constituents? They resent being forced to do that because they are in the minority in the district council, and have no control over the profligate spending of the Labour authority. They are grateful to my right hon. and hon. Friends for putting a limit on the waste of money, the cost of which falls on their heads.
If the hon. Member for Bootle (Mr. Roberts), who had a cackle and then went away, thinks that such measures do not affect employment in my constituency, he is wrong. By business men have to pay their rates, to pay for something of which they are not seeing the benefit, and which makes it difficult for them to stay in business and continue. It is no good the hon. Member for West Derby wagging his head, I know my constituency better than he does. He has enough difficulties. We do not aim to put up our money to help him to supply benefits to his constituents. We do it well enough on equalisation, and do not reckon to have to subsidise cheap transport for his constituents.

Mr. Tony Banks: Does the right hon. and learned Gentleman not believe that there is any benefit to businesses from the benefit of cheap travel?

Sir Ian Percival: There is none to my ratepayers in subsidising the transport of people in Liverpool. That is a fact, whether the hon. Gentleman likes it or not. They resent having to do it, and I agree with them. I am glad that my right hon. and learned Friends are taking steps to curb other people giving benefit to their constituents at the expense of my constituents.

Mr. Ridley: Hear, hear.

Sir Ian Percival: I am afraid that I may have to attack my right hon. and hon. Friends soon. I am glad that they agree with me so far.
The hon. Member for Wigan (Mr. Stott) said that Merseyside does not get any grant. Why does it not? Because it is spending so much money that it goes right outside the limits under which they would get any grant. It ill behoves any Labour Member to complain that we, and my constituents are part of the we, are not getting any grant. It is their spending that is depriving my constituents of the opportunity to receive the benefit of any grant and producing the situation in which my constituents are having to ante-up about another £5 million to keep low the fares of their constituents at our expense. That is crazy, and it is no good Labour Members saying that we should do it. There is no basis on which they can say that my constituents should pay for their constituens. If it were their constituents doing it for my constituents, they would be hollering even louder than I am.

Mr. Allen McKay: That is the type of people they are. They are happy to help.

Sir Ian Percival: It is so cheap and easy for the hon. Gentleman to say that when he is talking about the recipients. A great many of my constituents are no better off than his, and they deeply resent having to put their hands in their pockets for people who are at least as well off as they are and to provide benefits for which they do not ask themselves. My constituents do not ask for free transport.

Mr. McKay: They like concessionary travel, though.

Sir Ian Percival: The hon. Gentleman does not like it. I am rather glad, because that may mean that I am touching a few sore points.
My constituents understand what my right hon. and hon. Friends are doing, limiting the waste of money in which Labour-controlled authorities seem to exult. We do not understand, however, why we should be penalised at the same time. I hope that my hon. Friend, in winding up will assist me. If those who have wasted money had not wasted it, my constituents would be £5 million better off in the rates than they will be. If those over whom they have no control were not wasting money, we would get a grant of £25 million. Why can we not have that £25 million although they are wasting it. It is no good the hon. Member for West Derby laughing. This is no laughing matter. In no way will Opposition Members' cackling or giggling distract us. Irrespective of whether the hon. Member likes it, the money is going on my constituents' rates and I care about that.

Mr. Wareing: So do I.

Sir Ian Percival: Because of the wastefulness of the Labour party on Merseyside, my constituents will lose the benefit of the grant that they would have received if those over whom they have no control had exercised more control over spending. We do not ask for anything extra, but for my right hon. and hon. Friends to re-examine the matter and let us have the benefit to protect us from the excesses of the people to whom I have referred.
In saying that, I do not detract in any way from the main thrust of my attack, which is on those who seem to spend money as if it does not matter. The fact that such spending appeals to their constituents should not blind them to the fact that, to please their constituents, they are taking money from my constituents, who cannot afford it any more than theirs. There is no moral justification whatever for that.

Mr. Ridley: rose—

Mr. Deputy Speaker: Order. The right hon. and learned Gentleman has finished his speech and sat down.

Mr. Jim Callaghan: I have an interest in this debate, because I use public transport regularly. The people who use it with me are usually the very young, the very old and mothers with young children. In other words, they are people who do not have cars and cannot get about without public transport. If services are cut, the people who can least afford them will be affected.
In my area, anyone who does not have a car must take at least three buses to get to any hospital. The Middleton Guardian does not normally support the views of my end of the political spectrum, but on 3 January it ran a headline,
£10m Cut in Bus Budget
and the article said:
Reports that a massive £10M is to be cut from this year's Greater Manchester Transport bus services budget has confirmed the fears of Middleton GMC councillors. It is claimed that the £10M cut will cripple bus services, raise fares, and could lose jobs.
If that was not sufficient to alarm people, we need only to look at a regional paper a month later, the Manchester Evening News—again no supporter of our political views. The headline is, "Bus shocker", and it says, "2,000 jobs to go" and then:
Services cut and three depots are to be axed".
For the poorer section of the community, that is a horrific cut in services.
I could go on at length giving instances. When I was coming into the Chamber, I heard a member of the shadow Front Bench talking about having been ill in hospital for quite a long period. He said that his wife, who is not a car driver, found that she could not get to the hospital by public transport to visit him most nights, because it was too difficult to do so. He said that, by the time she had paid her fares, she had almost bought the taxi. Pensioners who from time to time need to go to hospital do not have that sort of money.
On the question of the proposed cuts, I wish to refer, not to the problems of the elderly, but to the mathematics of the cuts. These figures will spell out to the House and to the people of the various transport authorities exactly what the effect will be. In the Greater Manchester area, the maximum precept which the Secretary of State for Transport has proposed is 19·99p for the Greater Manchester transport authority. Together with grants, this


gives the authority a total expenditure level of £83·5 million for 1986–87. All things considered, this sum is totally inadequate for Greater Manchester's transport needs.
The year 1986–87 is an unusual one, to say the least, because after seven months bus deregulation will be introduced and the financing of public transport will be completely changed. The expenditure this year has to cover seven months of the existing system and five months of the new system. On the latest figures available, the situation is as follows. The period to 26 October will require a grant of about £38 million. Even within this total it will be necessary to increase fares by 10 to 15 per cent. We all know what that will mean to the poorer section of the community—the old-age pensioners, the young and those with young children. This leaves, out of a total of £83·5 million, a sum of £45·5 million, £6 million of which is earmarked by the Secretary of State for redundancy payments — for the 2,000 who are supposed to be clamouring to take redundancy payments, to which I shall come later—and for the losses involved in disposing of other surplus assets as a direct result of deregulation.
The sum of £6 million is totally inadequate. The passenger transport executive has just announced that about 2,000 jobs may have to go in four workshops, with all their engineering skills, and three bus garages. That will mean poorer services. The executive estimates that £25 million, not £6 million, will be needed. The men who are clamouring for redundancy should realise that only £6 million is available for redundancy payments. Spread over 2,000 men, that is £3,000 per man. Even with natural wastage, when the men realise how little they will get, they may have second thoughts. The rest of the money will have to be borrowed, leading to further debt charges. Therefore, only £39·5 million will be available for other expenditure.
The first call on the £39·5 million will be the debt charge which the passenger transport authority will take over from its predecessor and which it cannot avoid. That is estimated at £7·3 million. So, out of a total of £83·5 million £51·3 million is already spoken for, leaving £32·2 million for the PTA to spend on fulfilling its duties after deregulation. None of the expenditure can be reduced in the short term. Most of it involves long-term obligations.
The list omits one important item of expenditure—the provision of socially necessary bus services over and above those provided by the free market. Only £4·7 million is available, but nobody knows at the moment how much will be needed to finance those services. The PTE, which runs 98 per cent. of the buses in Greater Manchester, is likely to run only 60 per cent. of its bus mileage commercially. Therefore, 40 per cent. of the services, or four buses in 10, will not be running after October unless they are financed by support payments. The people of Greater Manchester should realise that.
The services at risk will be those going to works, schools, rural and outer suburban areas, as well as many early morning, evening and Sunday services. They are the least remunerative services, costing over £40 million per year. The top estimate of their revenue is £15 million, so they lose £25 million per year. Even if deregulation reduces costs by 30 per cent., as the Minister claims, the loss will still be £13 million.

Mr. David Mitchell: rose—

Mr. Callaghan: The precept order allows £4·7 million for providing the services. That is totally inadequate for the needs of the community in Greater Manchester.

Mr. Mitchell: Before the hon. Gentleman sits down—

Mr. Deputy Speaker: Order. The hon. Gentleman has sat down.

Mr. Matthew Parris: I should like to set the record straight on what my right hon. Friend the Secretary of State for Transport said in his speech to the Bus and Coach Council this evening. I listen often with interest and usually with admiration to what the hon. Member for Wigan (Mr. Stott) says, but what he said about my right hon. Friend's speech did not represent fairly what my right hon. Friend was trying to say.

Mr. Robert Hughes: They were precisely the words used.

Mr. Parris: They were precisely the words used, but if I said to the hon. Gentleman, "Do you like this?" and he replied. "Yes, and no," I might say that the hon. Gentleman had said, "Yes," but unless I mentioned that he had also said, "and no," I would be misinterpreting him.
It is important to put on record what my right hon. Friend the Secretary of State said. He said that what the bus industry was best at doing was running buses and what local authorities were best at doing was deciding on the level, the direction and the distribution of social provision, and that the purpose of the legislation was to separate those two so that busmen could cease trying to be amateur social workers and get on with the business of running buses, and the local authorities could do what they were elected to do, and decide where benefit should be directed. That seemed to me a fair point for my right hon. Friend to make in the circumstances.
My second point relates to the south Yorkshire PTA South Yorkshire runs into my constituency. I set aside the rights or wrongs of the measures the House is considering and assume, although we should not, that the House will approve those measures. I accept that the south Yorkshire PTA deeply and genuinely objects to the extent to which its expenditure will be cut and I accept that it has the strongest and most sincere reservations about the fact that fares will have to be increased, but the fact is that fares will have to be increased and the amount of subsidy it will be able to channel to the bus service will have to be reduced. I think that everybody accepts that, but there is a perfectly fair argument as to whether it is right.
That being so, south Yorkshire has to decide whether to get its customers used to higher fares by a gradual and incremental increase in the level of fares or whether to leave fares at their current very low level and suddenly, at the last moment, to allow a huge increase in fares. All the professional busmen, many of them ideologically in sympathy with the PTA, say that a series of incremental increases starting now is the fair and sensible way to treat the customers of the south Yorkshire PTA. On behalf of those customers I make this plea to the passenger transport authority — that, whatever the political advantage of a huge and sudden increase in fares in south Yorkshire, the


interest of the bus company and the passengers must lie in their being able gradually to get used to the increases, which will, I think, be a fact.

Mr. Robert N. Wareing: I believe that for the people of Merseyside the order is aimed at reducing the standard of living in an area which is already grossly deprived. The Merseyside passenger transport authority has had its expenditure redetermined at the level of £81·3 million. That is £20 million less than that required to maintain the service at its current level. I ask the House to bear in mind the fact that not only is the £81·3 million a very low figure but that it also has within it £5 million which, under Government diktat has to be put to one side, for the redundancies which will inevitably follow the implementation of the policy.
As my hon. Friend the Member for Bootle (Mr. Roberts) has said, Merseyside is also responsible for the airport. We are talking about a joint board, not the Merseyside county council — the alleged overspender that the right hon. and learned Member for Southport (Sir I. Percival) bleeped about. We are talking about a joint board which is now to be penalised at its outset and rate-capped for three years. No account has been taken of the social and economic needs of Merseyside, including the ratepayers that the right hon. and learned Member for Southport talked about. Twenty-one per cent. of his ratepayers do not have jobs but of those that do, half work in Liverpool and depend upon a rail service subsidised by the Merseyside county council. He can explain to his constituents when those services are either reduced or closed down. He has some explaining to do before he finally leaves his seat at the next general election.
On Merseyside we have 21 per cent. unemployment — 25 per cent. in Liverpool. Fifty per cent. of households do not go out every morning and get into a chauffeur-driven car, as Ministers do. They do not have a car at all. That is what we are talking about. In Liverpool that figure is as high as 62 per cent. Forget all the fancy notions. In my opinion and the opinion of my constituents, the people on the Front Bench are beneath contempt.
Ministers are not used to using public transport and they do not know what it is to have to depend on it. Many of those who live in the outer suburbs of Liverpool are 10 or 15 miles from the city centre and heavily dependent on bus services. About 16 per cent. of Merseysiders live on overspill estates, and they often endure appalling housing conditions. Concessionary fares allow pensioners to free themselves—the Conservative party talks so often about freedom—from the areas in which they live as a result of policies that have been introduced by Labour-controlled county councils.
Are Ministers aware that 75 per cent. of those who enter Liverpool city-centre shops have travelled to the area by bus, or rail and bus, including those who come from Southport? Do they realise that 66 per cent. of work journeys into the Liverpool city centre are by passenger transport, by rail as well as bus? Do they know that 25 per cent. of adults on Merseyside are dependent on social benefits, and therefore on a reasonable bus service provided at a reasonable price?
Since 1981, the people of Merseyside have enjoyed a fares policy which has met the real needs of the area. Fares

have been reduced twice and we are proud of the fact. Services have been improved, and we make no apology for that. The years of decline have been reversed. Since 1981, passenger usage of buses on Merseyside has increased by 27 per cent. Where has that happened in Tory-controlled areas? Those who use the bus service include people from Southport, Crosby, Wallasey, Wirral, West and Wirral, South. I challenge the Members who represent those constituencies to explain to their constituents why bus fares increase while both bus and train services are lost to them.
The pensioners in these areas, including those from Southport, which has been salvaged by the policy of the Labour-controlled county council, have free passes for bus and train travel. In 1985–86, this cost the Merseyside county council and the districts £18·5 million. The GRE set for transport for 1985–86 was £8·9 million, which was below the figure necessary to provide free transport for pensioners throughout Merseyside. The expenditure of £18·5 million related to the travel that now takes place, and much more money will be needed to provide concessionary fares throughout Merseyside. It seems that higher fares will have to be introduced, and it is estimated by the Merseyside passenger transport executive that fares will rise on Merseyside by about 70 per cent. That increase will take place in an area of utter deprivation. In other words, a 15p fare will be increased to about 21p. The authority estimates that in three years a 15p fare will become 52p.
Conservative Members talk about voluntary redundancies. About 4,300 jobs are at risk in the MPTE as a result of the Government's policy. The Government talk about defending the ratepayer—I should like to know how that talk is reconciled with no block grant being made available to Merseyside. How is that reconciled with the fact that the precepts for police, fire and public transport services—the three joint boards—come to 76·92p? That cost will be borne entirely by Merseyside ratepayers, and that must be compared with the 73p that Merseyside county council levies to cater for the three vital services and for all the other services that it has to provide.
Merseysiders will be exploited. I ask the Minister to compare what is happening in Tyne and Wear with what happens on Merseyside. There is tremendous unemployment in those areas. Tyne and Wear's transport allocation, according to the grant-related expenditure assessment, is £53 million. It is £45 million for Merseyside. Tyne an Wear is to be provided with a block grant of £33 million but Merseyside is to receive none.
Where is the fairness in that, even from this Tory Government? They are below contempt. I expect nothing from them. All I expect is that after the next general election Liverpool will be almost dominated by Labour Members of Parliament and that some of the outlying districts will be devoid of the Tory representatives who diminish this House. If the constituents of the right hon. and learned Member for Southport (Sir I. Percival) who voted for him at the last general election could have heard his speech tonight, it would have been the very last time that they voted for him.

Sir Ian Percival: Will the hon. Gentleman give way?

Mr. Wareing: No. I have said all that I want to say.

Mr. Deputy Speaker: Mr. Caborn.

Sir Ian Percival: rose—

Mr. Deputy Speaker: Order. The hon. Gentleman did not give way.

Sir Ian Percival: On a point of order, Mr. Deputy Speaker. The hon. Member for Liverpool, West Derby (Mr. Wareing) has referred over and over again to my constituency. Is it not the convention that he should give way?

Mr. Deputy Speaker: It may be the convention, but it is not a point of order. Mr. Caborn.

Mr. Richard Caborn: I do not intend to rehearse yet again all the transport arguments that were forcefully put to the Committee by the Opposition. It is obvious that they did not make any impression upon the Minister. South Yorkshire passenger transport executive is carrying by far the greatest number of passengers and it is increasing every year. This order will pull the guts out of south Yorkshire's social, cultural and industrial life.
Conservative Members have referred to the rates paid by industrialists. The increase in wages that will be needed to take account of a 225 per cent. increase in fares has to be found somewhere. Industrialists in south Yorkshire are extremely concerned about the fact that pressure will be applied through the collective bargaining procedure.
In addition, the south Yorkshire passenger transport executive will lose 1,600 jobs. There will also be a 10 per cent. reduction in services. That will be the effect on south Yorkshire, a community that has enjoyed an integrated transport system for the last 10 or 12 years.
The way in which the south Yorkshire passenger transport executive has been treated by the Department of Transport is nothing short of diabolical. The Minister said that there have been negotiations with the south Yorkshire passenger transport executive and the new joint boards. The joint boards sent to the Department of Transport a four-page questionnaire. It thought, naively, that there would be serious and real discussions about the problems that will be faced during the transitional period, but no answers were given to those questions. A delegation went to the Department of Transport to see the Secretary of State for Transport and the Minister of State. It deposited with the Department a full list of questions to try to find out what projections will have to be made if there is to be a smooth transition.
Four financial options were included in the three-year plan for 1986–89 which was sent to the Department of Transport on 26 July 1985. The south Yorkshire passenger transport executive referred to a
presentation containing detailed costings and service level reductions involved in bringing about a phased reduction to the Protected Expenditure Levels proposed by the Secretary of State … Both in correspondence and in response to questions to the delegation from South Yorkshire Joint Board and the PTE the Secretary of State has refused to state whether any figures supplied by the PTE or assumptions made by them for calculating the cost and implementing the 1985 Act are wrong or what different assumptions he is using and why.
The Department of Transport, the Secretary of State and the Minister of State have not answered any of the questions asked by the joint board or the PTE. That is the response to the order, even before deregulation on 26 October 1986.
The Government have been asking the joint boards and the PTEs to back a treble in the Derby, the Oaks and the

St. Leger or to hit the white on to four reds and get a cannon. This measure will affect the lives of thousands of people socially, culturally and industrially. It is deplorable that the joint board and the people of south Yorkshire have been treated with such contempt.
We have been dealing with a Secretary of State who is at the top of the league in terms of being taken to court for being on the wrong side of the law. The manner in which he has treated south Yorkshire is contemptible. Action should be taken on behalf of the south Yorkshire people. The Secretary of State should be taken to court to justify his actions in reducing by one third the revenue needed to fulfil our transport policy. This will have horrendous effects on the people of south Yorkshire.

Mr. Max Madden: Last Thursday, when this week's business was announced, my right hon. Friend the Leader of the Opposition rightly accused the Government of trying to steal legislation through the House late at night in the hope that much of it would not be made known to the people. The order is a prime example. I agree with my hon. Friend the Member for Wigan (Mr. Stott) that it is an absurdity and an obscenity that the democratic process means that important matters of this sort are dealt with at this time of the night.
The terms of the order are extremely unfair to the people of west Yorkshire. The settlement as a whole for west Yorkshire is unfavourable compared with the settlement for the other areas that are the subject of the order. West Yorkshire people get extremely low pay. They are dependent on public transport, especially buses. About 47 per cent. of households in west Yorkshire do not have a car or access to one. In Bradford that figure rises to more than 50 per cent.
Bus passengers are ratepayers—something that seems to have escaped the notice of the Minister of State and many other Conservatives. Many businesses recognise the importance of public transport and are willing to see expenditure on rates to maintain an effective, efficient bus transport system. In many urban areas of west Yorkshire—the same is true of many other regions—about two thirds of all the people who come to city centres for work, business and other reasons come by bus. On Saturdays, the figure is about 40 per cent. I would argue that most businesses, rather than resenting the amount of money that they pay in rates to maintain an effective public transport system, would say that they face a much bigger burden in the form of high interest rate and exchange rate payments and the cost of energy—matters that are the Government's direct responsibility.
Unless funds are made available for west Yorkshire, there will be a substantial loss in services. The authority estimate something of the order of 18 per cent. That means that many people will face a complete loss of services in rural areas. They will see cuts in Sunday bus services, in early morning and evening services, and also in late night services.
In Bradford we are anticipating an experiment where there will be last buses as late as 2 am. That sort of initiative will be in jeopardy if this Order stands and if more funds are not made available to the transport authority in West Yorkshire.
I draw particular attention to the transitional arrangements. We estimate in west Yorkshire that the transitional costs are going to be about £8·5 million—


much higher than the forecast. Only about £3 million was allowed by the Secretary of State. Job losses are estimated to be between 450 and 800.
Certainly, the redundancy payments are expected to be about £7 million. I would emphasise to the Government, who are so glib in saying that it really does not matter because all these jobs will be accounted for through natural wastage, and there will be voluntary redundancies, that these are job losses. These are the real jobs that the leader of the Conservative Party used to talk so much about. These are the real jobs that are going to be lost in areas of high unemployment. In west Yorkshire about 15 of every hundred people are unemployed, and we can ill afford to lose 800 real jobs in our bus industry.
Public transport, especially bus public transport, is an essential service. In west Yorkshire it is a vital service, and tonight we see a further attempt by this Government to sabotage that service. I am sure that the people that are going to suffer that sabotage when the buses that they used to catch are no longer available, will remember, despite the late hour, who is responsible.

Mr. Simon Hughes: The voices that have been raised on this side of the House in large measure represent the strength of feeling that people have about a service, decisions for which should not be taken by this House at all. The decisions about the level and cost of bus and train services should be taken in the places that are affected by the order.
The Minister has made it clear that he believes that his prime duty is not to the service, but to reducing the cost to certain ratepayers. They have a way of judging whether or not the rates they pay are appropriate.
The Government deny that. They pretend that there is not a link between rates and local elections, but the Minister knows that that is not entirely the case. He also knows that to say that the reduced transport cost that is met by ratepayers, and which contributes to local services, such as public transport, protects jobs in inner city and metropolitan areas, is contradictory, when the direct effect of the order—for the first time rate capping of public transport in the four metropolitan areas in question—is immediately felt in job losses.
The Minister held in his hand a bit of paper which showed that 2,000 people in Greater Manchester had accepted redundancy. If that is right, it shows that there are 2,000 fewer jobs. There is no evidence that people are going to find replacement jobs in the foreseeable future, let alone in the transport industries and the public service sectors.
We knew when abolition was proposed for county councils that there would be thousands of job losses. Nothing that the Government have yet done has restored anything like a small percentage of those jobs to people. For every person who loses a job, there may be a family, elderly relatives or dependants who need an income coming in, and a redundancy is not an equality in terms of the balance between that and the opportunity of continued employment.
With a good transport system, one has many advantages. My party does not run South Yorkshire, but the advantages to cities, such as Sheffield, of a late night public transport service at a cheap rate are great, especially

to its commerce and business. People can come and spend their money. That is good both socially and for the health and prosperity of the city. In South Yorkshire it is probable that fares will increase by 225 per cent. The Minister knows that, even starting at a low level, a 225 per cent. fare increase is a substantial addition to a weekly bill which many people can ill afford. I am thinking particularly of a mum who makes four journeys a day taking her child to and from school.

Mr. David Mitchell: Will the hon. Gentleman explain why fares in his constituency, which are substantially higher than the fares in South Yorkshire will be with a 225 per cent. increase, are fair to his constituents but not to constituents in South Yorkshire?

Mr. Hughes: The Minister will remember that I have criticised the policy of London Regional Transport, because since it has taken over bus services have decreased and fares have increased. I am not making a party political point, because, as the Minister knows, the fares fair policy was not introduced by my party. It was of substantial benefit to people on low incomes without mobility. In South Yorkshire, West Yorkshire, Greater Manchester, Merseyside and in my constituency the majority of people do not have their own transport. They cannot leap into a car which is sitting on the drive, because there is no car. By removing a subsidised public transport service to benefit the constituents, for example, of the right hon. and learned Member for Southport (Sir I. Percival), the Government are saying, "To those who have will be given the facility of services, but those who cannot afford private transport must just rot and stay at home."

Sir Ian Percival: Will the hon. Gentleman give way?

Mr. Hughes: I shall not give way. The right hon. and learned Gentleman made the same point over and over again, and we understood it. He said that he did not want social justice to require those who have to pay for those who have not. I reject and resent that. The same test that applies elsewhere should also apply to public transport.

Sir Ian Percival: On a point of order, Mr. Deputy Speaker. I said nothing of the kind. When personal attacks are made—

Mr. Deputy Speaker: Order.

Mr. Hughes: As a result of the orders instead of people in the areas in question deciding and offering the electorate a judgment on public transport, the Minister will take that decision. Those who will lose jobs and services will remember the Minister's speech and his attempt to separate commerce from social provision and social duty. Public transport is a public service, and should remain so. The Government should be aware that to privatise it is a gross disadvantage to those less able to help themselves. The Government have failed in their duty.

Mr. Allen McKay: My hon. Friends have dealt with the technical points, so I shall turn my attention to south Yorkshire. When we canvass at local elections, general elections and county council elections, we ask ratepayers what they think of the south Yorkshire transport policies. By and large, people agree with them. Some disagree and say that an extra penny or two on fares would help to ease the problem. We


have consistently asked constituents about the cheap bus fares policies, and for 10 years they have returned Labour councillors to the county council.
The Government are trying to recoup the money that has been amassed gradually for 10 years to keep the cheap bus fares policy going. They want to withdraw that money in one go. The withdrawal symptoms will be serious. For 10 years, local authorities have built their facilities around that cheap bus fares policy. Sports centres have been built because people can get to them. Shall shops in the rural areas have closed. People travel into the towns because it is cheaper to shop there. What will happen to those facilities when the bus fares increase by 225 percent.? The sports centres will not pay. There are no shops in the rural areas. Rural areas have run down as a result of Government policies. They are closing post offices in rural areas.
In the Wages Bill, the Government are trying to ensure that people do not have a weekly wage but are paid by cheque which will be cashed at a bank. They need transport to reach a bank from the rural areas. The transport will not be there because the deregulation and the grants will ruin the service.
The hon. Member for Derbyshire, West (Mr. Parris) said that the fares should he increased gradually. There is not time for them to go up gradually. The people should have been taken into consideration. The Government have not considered the people who use public transport. What about the industries that have a transport policy?

Mr. Robert Hughes: On a point of order, Mr. Deputy Speaker. May I draw your attention to Standing Order No. 3, which deals with exempted business? It makes plain that, with regard to statutory instruments,
Mr. Speaker shall put any questions necessary to dispose of such proceedings not later than half-past eleven o'clock or one and a half hours after the commencement of those proceedings, whichever is the later: Provided that, if Mr. Speaker shall be of opinion that, because of the importance of the subject matter of the motion, the time for debate has not been adequate, he shall, instead of putting the question as aforesaid, interrupt the business, and the debate shall stand adjourned till the next sitting".
I submit that we have not had adequate time to deal with an order that covers four metropolitan counties. We have not had an opportunity to hear the Minister's reply—

Mr. Deputy Speaker: Order. With great respect, the hon. Member is reminding me of a Standing Order that I consider every day. It is left to the Chair's discretion as to when the hour and a half is up and whether there has been enough time.

Mr. Hughes: Further to that point of order, Mr. Deputy Speaker. As you say, you look at this Standing Order every day. I am making a submission to you that these circumstances require special consideration. I ask you to rule accordingly.

Mr. Deputy Speaker: The Chair takes everything into consideration. The decision will be given when we have had an hour and a half. Mr. Allen McKay.

Mr. McKay: I was talking about industry. Conservative Members have talked about the cheap fares policy and said that industry does not like it. We visited industry and I have received no grumbles from industry. No one likes paying taxes and rates. I am sure all hon. Members will agree that they have come across that feeling.
There is industry in Yorkshire which has its own fares policy. The National Coal Board has a cheap bus fares policy, which costs it thousands of pounds each year. It is based on the cost of bus fares. If fares increase by 225 per cent., its contribution will increase by 225 per cent. That will be a levy on the National Coal Board. It will not be the only industry to suffer because some major contractors also have—

It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question pursuant to Standing Order No. 3 (Exempted Business).

The House divided: Ayes 151, Noes 101.

Division No. 70]
[1.50 am


AYES


Alexander, Richard
Knight, Greg (Derby N)


Amess, David
Lawler, Geoffrey


Ancram, Michael
Lennox-Boyd, Hon Mark


Arnold, Tom
Lightbown, David


Ashby, David
Lilley, Peter


Aspinwall, Jack
Lord, Michael


Atkinson, David (B'm'th E)
Lyell, Nicholas


Baker, Nicholas (Dorset N)
MacKay, John (Argyll &amp; Bute)


Baldry, Tony
Maclean, David John


Bellingham, Henry
Major, John


Bendall, Vivian
Malins, Humfrey


Benyon, William
Malone, Gerald


Best, Keith
Maples, John


Biffen, Rt Hon John
Marlow, Antony


Biggs-Davison, Sir John
Marshall, Michael (Arundel)


Blackburn, John
Mather, Carol


Bonsor, Sir Nicholas
Maude, Hon Francis


Boscawen, Hon Robert
Maxwell-Hyslop, Robin


Bottomley, Mrs Virginia
Mayhew, Sir Patrick


Bowden, Gerald (Dulwich)
Merchant, Piers


Brandon-Bravo, Martin
Meyer, Sir Anthony


Bright, Graham
Miller, Dr M. S. (E Kilbride)


Brinton, Tim
Mills, Iain (Meriden)


Brooke, Hon Peter
Mitchell, David (Hants NW)


Bruinvels, Peter
Moate, Roger


Buck, Sir Antony
Montgomery, Sir Fergus


Budgen, Nick
Murphy, Christopher


Burt, Alistair
Neale, Gerrard


Butterfill, John
Nelson, Anthony


Carlisle, John (Luton N)
Neubert, Michael


Carlisle, Kenneth (Lincoln)
Nicholls, Patrick


Chope, Christopher
Norris, Steven


Clark, Dr Michael (Rochford)
Page, Sir John (Harrow W)


Coombs, Simon
Page, Richard (Herts SW)


Cope, John
Parris, Matthew


Couchman, James
Pawsey, James


Cranborne, Viscount
Percival, Rt Hon Sir Ian


Currie, Mrs Edwina
Pollock, Alexander


Dickens, Geoffrey
Portillo, Michael


Dorrell, Stephen
Powell, William (Corby)


Dover, Den
Powley, John


Durant, Tony
Raffan, Keith


Dykes, Hugh
Rhodes James, Robert


Eggar, Tim
Rhys Williams, Sir Brandon


Emery, Sir Peter
Ridley, Rt Hon Nicholas


Fallon, Michael
Roberts, Wyn (Conwy)


Favell, Anthony
Roe, Mrs Marion


Forsyth, Michael (Stirling)
Rost, Peter


Garel-Jones, Tristan
Ryder, Richard


Greenway, Harry
Sackville, Hon Thomas


Gregory, Conal
Sayeed, Jonathan


Griffiths, Sir Eldon
Shaw, Sir Michael (Scarb')


Ground, Patrick
Shelton, William (Streatham)


Hamilton, Hon A. (Epsom)
Sims, Roger


Hampson, Dr Keith
Smith, Tim (Beaconsfield)


Hanley, Jeremy
Speed, Keith


Harvey, Robert
Spencer, Derek


Heddle, John
Stanley, Rt Hon John


Henderson, Barry
Stern, Michael


Hogg, Hon Douglas (Gr'th'm)
Stevens, Lewis (Nuneaton)


Hubbard-Miles, Peter
Stewart, Allan (Eastwood)






Stewart, Andrew (Sherwood)
Wardle, C. (Bexhill)


Stradling Thomas, Sir John
Watson, John


Sumberg, David
Watts, John


Temple-Morris, Peter
Wells, Bowen (Hertford)


Thomas, Rt Hon Peter
Wheeler, John


Thompson, Donald (Calder V)
Whitfield, John


Thompson, Patrick (N'ich N)
Winterton, Mrs Ann


Thornton, Malcolm
Winterton, Nicholas


Tracey, Richard
Wolfson, Mark


Trippier, David
Wood, Timothy


Trotter, Neville
Yeo, Tim


Twinn, Dr Ian
Young, Sir George (Acton)


Waddington, David



Waldegrave, Hon William
Tellers for the Ayes:


Walden, George
Mr. Tim Sainsbury and


Waller, Gary
Mr. Peter Lloyd.


Ward, John





NOES


Adams, Allen (Paisley N)
Hughes, Simon (Southwark)


Archer, Rt Hon Peter
John, Brynmor


Atkinson, N. (Tottenham)
Jones, Barry (Alyn &amp; Deeside)


Banks, Tony (Newham NW)
Kaufman, Rt Hon Gerald


Bennett, A. (Dent'n &amp; Red'sh)
Lambie, David


Bermingham, Gerald
Lamond, James


Blair, Anthony
Leadbitter, Ted


Boyes, Roland
Leighton, Ronald


Bray, Dr Jeremy
Lewis, Terence (Worsley)


Brown, Gordon (D'f'mline E)
Litherland, Robert


Brown, N. (N'c'tle-u-Tyne E)
Lloyd, Tony (Stretford)


Brown, Ron (E'burgh, Leith)
Loyden, Edward


Caborn, Richard
McCartney, Hugh


Callaghan, Jim (Heyw'd &amp; M)
McDonald, Dr Oonagh


Campbell-Savours, Dale
McKay, Allen (Penistone)


Canavan, Dennis
McTaggart, Robert


Clark, Dr David (S Shields)
McWilliam, John


Clarke, Thomas
Madden, Max


Clay, Robert
Marek, Dr John


Clelland, David Gordon
Martin, Michael


Clwyd, Mrs Ann
Maxton, John


Cocks, Rt Hon M. (Bristol S)
Michie, William


Cohen, Harry
Morris, Rt Hon J. (Aberavon)


Cook, Frank (Stockton North)
Nellist, David


Corbyn, Jeremy
Oakes, Rt Hon Gordon


Cunliffe, Lawrence
Orme, Rt Hon Stanley


Dalyell, Tam
Park, George


Davies, Ronald (Caerphilly)
Parry, Robert


Davis, Terry (B'ham, H'ge H'l)
Pike, Peter


Deakins, Eric
Powell, William (Corby)


Dewar, Donald
Prescott, John


Dormand, Jack
Radice, Giles


Dubs, Alfred
Redmond, Martin


Eadie, Alex
Richardson, Ms Jo


Eastham, Ken
Roberts, Allan (Bootle)


Evans, John (St. Helens N)
Rowlands, Ted


Ewing, Harry
Short, Ms Clare (Ladywood)


Fatchett, Derek
Skinner, Dennis


Fields, T. (L'pool Broad Gn)
Smith, C.(Isl'ton S &amp; F'bury)


Fisher, Mark
Soley, Clive


Flannery, Martin
Spearing, Nigel


Forrester, John
Stott, Roger


Foster, Derek
Thomas, Dr R. (Carmarthen)


Foulkes, George
Wardell, Gareth (Gower)


George, Bruce
Wareing, Robert


Hamilton, James (M'well N)
Welsh, Michael


Hardy, Peter
Winnick, David


Harrison, Rt Hon Walter
Young, David (Bolton SE)


Hogg, N. (C'nauld &amp; Kilsyth)



Home Robertson, John
Tellers for the Noes:


Hoyle, Douglas
Mr. Don Dixon and


Hughes, Robert (Aberdeen N)
Mr. Frank Haynes.


Hughes, Sean (Knowsley S)

Question accordingly agreed to.

Resolved,
That the draft Precept Limitation (Passenger Transport Authorities) (Prescribed Maximum) Order 1986, which was laid before this House on 29th January, be approved.

Orders of the Day — Centre for Single Homeless, Irvine

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lennox-Boyd.]

Mr. David Lambie: The Cochrane street centre for single homeless project was mooted more than three years ago by Cunninghame district council because of the increasing problem of single homeless with social, psychological, psychiatric and financial problems presenting themselves to the housing department. Some of those people had, at one time, been tenants of the council but for various reasons had to give up their tenancies. They were known to have personal problems which could not be solved by merely rehousing them. Indeed, if we did that, we were aware that their immediate neighbours would come at once to the housing department and demand to be transferred to other areas or have the unfortunate single person evicted for anti-social behaviour.
We did not have general needs housing in the district which would meet the needs of those prospective tenants. Cunninghame district council was trying to diversify its housing to meet the needs of all categories of people who require housing in this project. The unit at Cochrane street was to be used by the Salvation Army and Cunninghame district council to provide not only shelter, but support, comfort and guidance. The tenants were to have training, work experience and, we hope, motivation to integrate back into society. As part of the treatment plan, Cunninghame district council would provide the workshops to refurbish furniture and electrical goods where the tenants would be supervised by trained staff. They would receive payment for their work, and the workshops would be adjacent to the unit. Cunninghame district council would also set aside general needs housing in all areas to rehouse the tenants when they were ready to move on. This would ensure that the unit would not become blocked or used as permanent housing.
All appropriate agencies were consulted, and they promised to support the project. They included the local social work department of Strathclyde regional council, the DHSS and the Scottish Council for Single Homeless. The project would also complement the supported lodgings scheme sponsored by Strathclyde regional council and financed by urban aid. After those consultations, the council's director of technical services was instructed to design a purpose-built centre within urban aid capital cost limits to provide accommodation for single homeless people to meet the private needs of the residents and the need to provide adequate control and supervision of the centre.
The district council submitted the project to the Scottish Development Department's urban renewal unit for urban programme grant, with much expectation. However, in a letter dated 23 April 1985, the urban renewal unit advised the council that its application for urban aid grant for the centre had been rejected. The decision was accompanied by a comment that the capital cost of the project was extremely high, and the suggestion that Cunninghame district council reconsider the scale and design of the project in consultation with the Scottish Council for Single Homeless.
Since receipt of that letter, Cunninghame district council has consulted the Scottish Council for Single


Homeless and the Salvation Army, which have agreed to manage the centre. As a result of the consultations, a revised design was prepared. The original proposals provided accommodation for 32 persons, including five self-contained flats with central kitchen and dining facilities, and day-care facilities. To reduce the costs, a revised plan was prepared as the basis for consultations, which included ½ two storey accommodation for 20 single persons in four clusters of five bed-sits. Each cluster has a common bathroom, and lounge/kitchen/dining area. Each individual bedsit incorporated a WC and wash hand basin. The central kitchen/dining and day care facilities were deleted from the original plan.
Following consultations with the Salvation Army, the plans were altered to provide showers within each bedsit, thereby allowing the communal bathrooms for the two upper floor clusters and one ground floor cluster to be deleted and replaced in each case with storage accommodation. On the advice of the Salvation Army, however, a disabled shower and toilet has been provided on the ground floor for use as required. A covered direct link has also been designated between the warden's house and the centre to allow the warden speedy access to the centre if necessary without requiring to enter through the main entrance.
The main point made by the Scottish Council for Single Homeless was that the centre should also cater for persons requiring more privacy while resident in the centre and, where necessary, to prepare residents for the more independent lifestyle that they would require to adopt on leaving the centre. The design of one of the ground floor bedsit clusters has therefore been amended by deleting the communal lounge/kitchen/dining area and increasing the size of each bedsit to include kitchen facilities. The SCSH also pointed out that the location of the laundry next to the communal/visitors lounge could cause disturbance and the plans have therefore been altered by placing the visitors toilet between the laundry and the lounge.
The revised design had implications for estimated operating costs of the centre and a fresh budget was prepared. Staff salaries were based on Salvation Army gradings for similar posts elsewhere. The staff to client ratio is high, but this is necessary to provide the intensive supervision care and counselling which it is envisaged that the centre will provide. Income will be derived entirely from rental payments. The income figure included in the draft budget is based on a rent of £40 per person per week but this may require to be altered according to circumstances, including current DHSS regulations.
The Minister can imagine the councils's astonishment when it received a letter dated 13 January 1986, from the urban renewal unit, saying that the revised application for urban programme grant for the Cochrane street project had been turned down. The letter said:
At a capital cost of £405,000, which may be a conservative estimate, and also in running costs the project is still very expensive. After full consideration we feel that there are not sufficient grounds, in terms of Urban programme priorities … or in terms of an exceptional scale or nature of benefits, to justify approval. I am afraid that we are therefore unable to offer Urban Programme support.
When I met the Minister on 24 January, in the Scottish Office in London, asked him to overturn the decision, and put the council's case to him to grant the application, he refused, and he accepted the reasoning of the urban renewal unit.
This project is unique in Scotland. It is more than a hostel, but it is not an institution. Admission would be voluntary, and the tenant would have to agree to the programme. An advisory group would be set up to monitor the running of the unit. The model for this project is run by the Salvation Army in Vancouver, Canada, and two of the councillors have visited it. Councillor Teresa Beattie, and Councillor George Steven, who works for the Salvation Army and is convenor of the planning committee, took the opportunity to go there when on a visit to Canada. The project leader in Vancouver, Major Campbell, will visit Scotland later this year and he has agreed to advise the council on setting up the hostel.
The running costs will be high initially, but they were projected into 1987–88. They are not prohibitive for this type of venture, which is unique in Scotland. Revenue will be available from the Department of Health and Social Security, from the workshops and from local funding by the Salvation Army through fêtes, bazaars and the rest. The Salvation Army has practical experience of providing care for this type of person. It is renowned for maintaining this type of establishment economically and for providing this type of care and support.
From our discussions—I have been involved in all of them—with the Salvation Army, it is clear that it is committed to the project. It regards it as a pilot scheme in the United Kingdom and as a new initiative. We hope that the project would be self-financing within four years. CDC and the Salvation Army have complied with the original demands of the Scottish Office in reducing the cost to under £500,000 and have also taken the advice of the agencies recommended by the Scottish Office. Mrs. Beattie, the convenor of the council, says in a letter:
We would be demoralised if this project was turned down as we have spent so much time and effort following the demands and advice given by the Scottish Office.
I submit that the project satisfies the urban programme priorities in terms of exceptional scale and the nature of the benefits. It therefore justifies approval. I am asking the Minister to review the decision given to me on 13 January and to grant approval or, if he cannot do that, at least to agree to meet a deputation of councillors and representatives of the Salvation Army and others involved in the project to give us an opportunity to have a full discussion to see whether the project could be included in plans for the future.

The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): The hon. Member for Cunninghame, South (Mr. Lambie) has, as I would expect, given us a clear expression of his support for the project for the centre for the single homeless in Cochrane street, Irvine, which would provide facilities for 20 homeless residents. He has made it clear that he believers that it would meet a real need in the area. I recognise the hon. Gentleman's strength of feeling that this project deserves to go ahead if at all possible.
I hope that the hon. Member will accept that it was with regret, and only after the most careful and extended consideration, that my Department concluded that the urban programme assistance sought for this project could not be approved.
To explain why we had to refuse this application, I need to go back to November 1984, when my right hon. Friend, the previous Secretary of State for Scotland, issued a


restatement of the criteria and priorities within which the urban programme would in future operate. These revised eligibility criteria and priorities are designed to improve the effectiveness, and the cost-effectiveness, of the urban programme in tackling multiple deprivation in urban areas. To that end, we tightened up the definition of areas eligible for urban aid. We stressed the need for projects to be new and innovative and we made it clear that priority would be given to those project which would make the best contribution to tackling deprivation.
We also insisted that projects should be cost-effective and, in particular, laid down that projects with a capital cost of over £500,000 would in no circumstances be considered, and those costing over £300,000 would require to offer benefits of a quite exceptional scale or nature to be accepted for support. I am sure that the hon. Member will not quarrel with the intention behind these revised criteria and priorities, which is to ensure that the available resources are used to the best possible effect.
In practice, this means that since 1984 any unusually expensive capital project has to demonstrate quite exceptional merit in terms of its contribution to a comprehensive deprivation strategy for the area, its degree of innovation, its involvement of voluntary or community effort and its value for money.
So how did the proposed centre for the single homeless score on these factors? The short answer is, not too badly, but not nearly well enough.
In the first place, the proposed catchment area for the project is not exceptionally high-priority. While a few parts of the catchment area rank among the relatively most deprived areas, most are not within the worst 5 per cent. in Scotland. As a whole, therefore, the catchment area defined for this project is not amongst the very worst in Scotland.
In the second place, although this project developed out of the district council's concern with local single homelessness as a significant problem in the area, and although the project brings together rehabilitative elements as well as physical housing provision, it cannot really be said to be integral to a comprehensive or co-ordinated strategy for tackling deprivation in the area. Other essential policies and projects do not hinge on it.
What we had in mind in saying in 1984 that priority would be given to projects which are key elements in a properly documented comprehensive strategy to tackle the problems of an area was to encourage authorities to develop programmes of projects to tackle a range of local problems in a systematic fashion over a number of years. No evidence has been submitted to the Scottish Development Department to suggest that this project is integral to a programme of this kind: on the contrary, the various projects submitted by Cunninghame district council over recent years, however worthwhile individually, seem to have little in common, and usually not to be linked in any way.
Thirdly, it has to be said that the project is not particularly innovative. This type of provision has been tried out already in other parts of Scotland. It is therefore not possible to say that this project would have an experimental value. We already have considerable evidence that this type of provision makes a good deal of sense. Indeed, there should by now be enough evidence

to convince local authorities that provision of this sort should be met from their mainstream resources, where necessary.
Fourthly, the number of people to benefit directly from the project, as I think the hon. Member appreciates, would be small. At any one time, only 20 individuals could be housed in the unit. In comparison with the total number of deprived households locally—and, more particularly, in comparison with the numbers which might benefit fom other urban programme projects—very few indeed would benefit from this project.
Finally, and most significantly, the costs of the project are extremely high. The original project application, which was turned down last summer, had estimated capital costs of £497,000, perilously close to the limit of £500,000. Estimates being what they are, it seems very likely that actual costs would have exceeded that figure. In turning down the project, as the hon. Member has pointed out, my officials did ask the district council to reconsider the scale and design of accommodation, in further discussion with the Scottish Council for Single Homeless. Our aim was to see whether the costs could be reduced sufficiently to avoid the need for exceptional merit to be demonstrated.
Revised proposals were submitted for a smaller scale centre which was, at £405,000, cheaper than before, but unfortunately still markedly above the £300,000 normal limit. On top of these capital costs, running costs of nearly £100,000 would be required.
My Department's conclusion was that, even after the reworking and reduction in scale, the costs involved remained unacceptably high in relation to the benefits, and were not likely to represent value for money. We concluded therefore that the benefits in terms of impact on the local community as a whole did not justify the costs and therefore that the case for exceptional treatment had not been made out.
I must stress that this refusal does not mean that we think that this project is without value. I am very aware of the problem of single homelessness, and I would wish, wherever possible, to support suitable projects aimed at tackling this problem. But the resources available for the urban programme are limited; and it is simply not acceptable for a single, very expensive project to take up a sizeable slice of those resources unless it can show very exceptional merits indeed in terms of the stated aims of the programme.
When I met the hon. Member to discuss this decision last month, I undertook to consider whether any other sources of central Government support might be available for this project, and to let him know. I regret to have to tell him that I see no prospect of support from other sources. The only other conceivable funding vehicle for such projects from central Government is assistance under section 10 of the Social Work (Scotland) Act 1968 but again the project is not sufficiently innovative to be eligible. In any event, this is already fully committed for 1986–87. I am afraid therefore that, if Cunninghame district council wishes to provide this new facility, it seems likely that it will have to find the money itself.
I know that this conclusion will come as a disappointment to the hon. Member for Cunninghame, South, who has campaigned long and hard on behalf of the project. In terms of the criteria and priorities for the urban programme, however, and in the light of the continuing


intense high quality competition for its resources, I am afraid that projects like this are simply not strong enough to gain approval.
However, I am pleased to inform the hon. Member that Cunninghame district council has today submitted five new projects for urban programme support for 1986–87. Clearly my Department will have to spend some time in appraising the new applications, but at least one of them—I note that it is the one to which the council itself has given the highest priority—seems at first glance to be very attractive indeed in terms of the criteria and priorities

of the urban programme. It is a project to upgrade in stages the physical environment of a rundown council housing estate, while at the same time educating and encouraging the local population to care for their environment, and to participate in community self-help. If my Department is able to approve the project, I very much hope that that will be of some consolation to the hon. Member.

Question put and agreed to.

Adjourned accordingly at twenty-two minutes past Two o'clock.